Best date to open a regular saver?

JustAnotherSaver

I had an email from Santander today about their 5% regular saver & it gave a projected final balance of "up to" depending on the date the account is opened.

Which made me wonder when would be the best date of the month to open a regular saver?

No take away all the answers like before it's too late as the account may not be on offer tomorrow and answers like it's only going to make a few pence difference so it doesn't matter....

...which date would be the best? Would it be the 1st of the month or the final date of the month? Or will each bank have its own way of calculating depending on their T&Cs?

EachPenny

JustAnotherSaver wrote: »

I had an email from Santander today about their 5% regular saver & it gave a projected final balance of "up to" depending on the date the account is opened.

...which date would be the best? Would it be the 1st of the month or the final date of the month? Or will each bank have its own way of calculating depending on their T&Cs?

From what I've seen it all depends on the T&C's for each account and how a 'month' is defined.

My reading of the Santander T&C's was the second and subsequent payments cannot go in before the anniversary date of the account opening, so there is no difference which day of the month you open the account, other than if you want to work out when bank holidays fall to ensure the anniversary date misses as many as possible.

I used to aim to open a new regular saver very near the end of a month on the basis that a few days later I'd be able to make a second payment and then I'd have two month's payments in the account for most of the first 30 days it was open.

Now I work on the basis that every day I have money earning only 1% is a wasted opportunity, and getting it into a regular saver paying X% asap is the best strategy.

For some accounts like the Virgin ones, with a fixed end date, then asap is the only way to go.

So no simple answer, it depends on the account.

Eco_Miser

Answering the question literally: for those accounts based on calendar months a minute advantage can be gained by opening on the last available day in June (probably the 26th), then making the second payment 1st July, so the interest earned in the first full month (July) is on 31 days times two subscriptions, and in the second full month (August) on 31 days times (three subscriptions plus a month's interest). The extra two days interest will then be compounded in the remaining months.
Conversely, 1st February would be the worst date to open a regular saver as the first interest payment only covers 28 days.

However the interest lost while waiting for the perfect time is likely more than the gain from timing the account.