Regular Saver Thread **New and Restarted**

EthicsGradient

colsten wrote: »

One of the reasons the site's calculator is "out" (which it isn't), is that it definitely does not use your rough-and-ready-reckoner, but the proper method of calculating interest on a savings account.

We don't, however, know, the exact assumptions the site calculator uses for the dates deposits are made. That's the reason why it may produce a slightly different result to other proper calculators which might make different assumptions.

One of the most likely reasons for penny discrepancies is that one calculator assumes deposits are always made on the 1st of a month. However, if the 1st of a month is not a working day, the deposit will not happen for at least another day, and therefore the month's deposit won't be earning interest from the 1st. The most precise calculators would take weekends at the start of a month into account.

Having said all this, your rough-and-ready-reckoner is a good enough method to use for those who cba with using a proper calculator. The bank or building society will, in the end, pay the correct amount.

Yes, though the point is my "rough-and-ready-reckoner" gives the exact same result as the bank says. While there can be slight variations depending on which day you start, to be more accurate you would have to give a different figure for every possible combination of days of the week and days in a month. This is unfeasible, so the bank, and myself, have given the only reasonable general answer.

adindas wrote: »

Regarding the interest, I do not remember the more accurate figure, but it is about 0.6x.

It is exactly 13 / (12*2), or 0.54166....

colsten

EthicsGradient wrote: »

Yes, though the point is my "rough-and-ready-reckoner" gives the exact same result as the bank says. While there can be slight variations depending on which day you start, to be more accurate you would have to give a different figure for every possible combination of days of the week and days in a month. This is unfeasible, so the bank, and myself, have given the only reasonable general answer.

Whichever way you portray it, your method is absolutely definitely not how any provider will ever calculate the interest on a Regular Saver.

Though as I already said, your method is good enough to use for those who cba with using a proper calculator.

surreysaver

adindas wrote: »

I fail to understand people want to investigate for such a very tiny difference (in pence)

The sort of people who go chopping and changing accounts for an extra quarter of a percent interest are the same sort of people who will investigate a discrepancy of 19p.

schiff

Shall we have a poll?

Under 10p - it isn't worth it. And not even worth discussion.

Between 11p and 20p - formal complaint to the interest paying entity.

21p to 50p - Financial Services Authority.

Over 50p - approach your solicitor to consider legal action.

It gets like this when everybody is bored waiting for the next Virgin to be issued. And that in turn will unleash plentiful reports of appointments booked, account opening successes and maybe some sadness that it's at 2% interest again.

Eco_Miser

colsten wrote: »

Whichever way you portray it, your method is absolutely definitely not how any provider will ever calculate the interest on a Regular Saver.

Though as I already said, your method is good enough to use for those who cba with using a proper calculator.

The actual calculation will use the daily balance, which takes into consideration the actual day each subscription reaches the account, the length of February, the varying other month lengths etc. However I would not be surprised to find the predicted interest in the Key Facts to have been calculated using EthicsGradient's method, which would be totally accurate for 12 equally spaced payments.

polymaff

MSE is chock-full of square-pegs, so show a bit of tolerance.


If we only did "sensible" things, we probably wouldn't be on MSE...:)

MDMD

adindas wrote: »

Exactly.
Regarding the interest, I do not remember the more accurate figure, but it is about 0.6x. So if the RS is paying 3%, it is equivalent to about 1.8% of the whole balance provided that you put the same amount of money on the same date each month.

As the interest is calculated daily all of that is something to do with how long the particular chunk of money is in the saving account.

The more accurate figure is 6.5/12 or about 0.54, which gives (for example) £44.69 (3000x2.75%x (6.5/12) for HSBC’s RS, exactly what they give.

https://www.hsbc.co.uk/savings/products/regular-saver/

polymaff

MDMD wrote: »

The more accurate figure is 6.5/12 or about 0.54, which gives (for example) £44.69 (3000x2.75%x (6.5/12) for HSBC’s RS, exactly what they give.

https://www.hsbc.co.uk/savings/products/regular-saver/

And for those accounts where you can open and fund it at the end of a month and then pile in subsequent payments on the 1st of succeeding months, it is about 7.5/12.

polymaff

MDMD wrote: »

The more accurate figure is 6.5/12 or about 0.54, which gives (for example) £44.69 (3000x2.75%x (6.5/12) for HSBC’s RS, exactly what they give.

https://www.hsbc.co.uk/savings/products/regular-saver/

The same assumptions do tend to produce the same result, Sherlock...:)

vermania

I got the dreaded Coventry BS letter today, always know if it's in a Coventry envelope that it bears bad news. For those who have the 10 year old ex-Stroud and Swindon Regular Saver the interest rate is reducing again to 2.20%.

And just with rumours of a base rate decrease going around, after which they'd slap the rate down again. Apparently mortgage rates are too competitive to keep the interest as it is. Yes, there is still little better out there right now, but it seems it won't be long before the deposits in these long-held accounts might be better off in a fixed term account. Or making the most of the low mortgage rates and buying property. Or just anywhere but a savings account!