Regular Saver Thread **New and Restarted**

Terry_Towelling

For the purpose of this post please ignore all other products that may be better; I am only trying to suggest the best way to maximise the 1.5% interest on the 'up-to-£5K' tier. The way the account calculates interest and what balances it uses to do that are a bit complex so what I suggest might look a bit odd - and I haven't tested it yet!

If you apply for an account, make a deposit of £5K a day or two after opening. This ensures that your start balance is zero and not £5K. On the 3rd last business day of that month draw out all but £50. When the next month starts NWB should see your balance has increased by £50 (from the zero start) and you get interest at 1.5% on what was mostly a £5K balance.

Then on the 1st business day of the next month restore the balance to £5K. On the 3rd last business day of that month withdraw all but £100. (another £50 increase will then have happened and you get interest on a mostly £5K balance).

On the first business day of the next month restore your £5K balance. On the 3rd last business day take out all but £150 (another £50 monthly increase and more interest). Keep doing this, ensuring that the amount you leave in at month end is £50 more than it was the previous month. Hopefully you get the picture. This method should ensure you get 1.5% interest every month on a balance that is £5K for most of the month.

You can try to cut things finer with your re-deposits but, given the way NWB calculates interest and when they count a deposit as 'paid in', it's probably not worth risking it.

If you think that's too much of a faff for just 1.5% interest, you're probably right (and you do need £5K up front to make it work) but it is probably the best easy-access interest rate going and you're not restricted to how much you can put in each month. Trouble is it takes a lot of managing to do.

I just put it out there as a way of maximising the return on this regular-saver product - please don't shoot me down - unless you think I'm barking and have missed something fundamental (likely), in which case fire away!.

ctdctd

Terry_Towelling wrote: »

For the purpose of this post please ignore all other products that may be better; I am only trying to suggest the best way to maximise the 1.5% interest on the 'up-to-£5K' tier. The way the account calculates interest and what balances it uses to do that are a bit complex so what I suggest might look a bit odd - and I haven't tested it yet!

If you apply for an account, make a deposit of £5K a day or two after opening. This ensures that your start balance is zero and not £5K. On the 3rd last business day of that month draw out all but £50. When the next month starts NWB should see your balance has increased by £50 (from the zero start) and you get interest at 1.5% on what was mostly a £5K balance.

Then on the 1st business day of the next month restore the balance to £5K. On the 3rd last business day of that month withdraw all but £100. (another £50 increase will then have happened and you get interest on a mostly £5K balance).

On the first business day of the next month restore your £5K balance. On the 3rd last business day take out all but £150 (another £50 monthly increase and more interest). Keep doing this, ensuring that the amount you leave in at month end is £50 more than it was the previous month. Hopefully you get the picture. This method should ensure you get 1.5% interest every month on a balance that is £5K for most of the month.
..........

Might be easier to put £5K up front and then £50 per month - then you get 1.5% on £5K and 1% on the £50 upwards each month.


If you need the cash, withdraw it all on the 1st of a month and re-deposit to start again on the 1st of the next month.


Been running my account like this since it started - although the £50 was £100 back then!

EachPenny

Terry_Towelling wrote: »

For the purpose of this post please ignore all other products that may be better; I am only trying to suggest the best way to maximise the 1.5% interest on the 'up-to-£5K' tier. The way the account calculates interest and what balances it uses to do that are a bit complex so what I suggest might look a bit odd - and I haven't tested it yet!

Or you could try doing as this poster suggested....
https://forums.moneysavingexpert.com/discussion/comment/73932905#Comment_73932905

...it works.

Doing it that way round is useful if the Savings Builder account is where you keep proceeds from regular saver accounts and the balance could vary significantly month to month. With the usual £5000 + X x £50 approach you need to always have £5000+ in the account on the magic day, which might mean borrowing from other higher interest paying accounts to top the balance up. Withdrawing down to X x £50 at the end of the month just requires an account somewhere to hold the money for a few days.

Natwest don't process payments over the weekend, so special care needs to be taken when the second-last working day falls near or on a weekend.

However, with Lloyds and BoS reducing their rates soon there will be so many options at 1.5% that the Savings Builder account will be a lot less interesting.

soulsaver

Terry_Towelling wrote: »

For the purpose of this post please ignore all other products that may be better; I am only trying to suggest the best way to maximise the 1.5% interest on the 'up-to-£5K' tier. The way the account calculates interest and what balances it uses to do that are a bit complex so what I suggest might look a bit odd - and I haven't tested it yet!

If you apply for an account, make a deposit of £5K a day or two after opening. This ensures that your start balance is zero and not £5K. On the 3rd last business day of that month draw out all but £50. When the next month starts NWB should see your balance has increased by £50 (from the zero start) and you get interest at 1.5% on what was mostly a £5K balance.

Then on the 1st business day of the next month restore the balance to £5K. On the 3rd last business day of that month withdraw all but £100. (another £50 increase will then have happened and you get interest on a mostly £5K balance).

On the first business day of the next month restore your £5K balance. On the 3rd last business day take out all but £150 (another £50 monthly increase and more interest). Keep doing this, ensuring that the amount you leave in at month end is £50 more than it was the previous month. Hopefully you get the picture. This method should ensure you get 1.5% interest every month on a balance that is £5K for most of the month.

You can try to cut things finer with your re-deposits but, given the way NWB calculates interest and when they count a deposit as 'paid in', it's probably not worth risking it.

If you think that's too much of a faff for just 1.5% interest, you're probably right (and you do need £5K up front to make it work) but it is probably the best easy-access interest rate going and you're not restricted to how much you can put in each month. Trouble is it takes a lot of managing to do.

I just put it out there as a way of maximising the return on this regular-saver product - please don't shoot me down - unless you think I'm barking and have missed something fundamental (likely), in which case fire away!.

Not shooting you down, but I'd choose to to open it with £5k and increase it by £50 pm - then you get 1.5% on £5K plus 1% on each £50 for the next 12 months or however long the rates are available for.

Fingerbobs

What happens with the Ipswich Building Society Monthly Saver if the £500 incoming payment for the final month goes in before the anniversary date in the same month?

E.g. - The Anniversary date is the 9th June, but the incoming Standing Order is deposited on 6th June.

Do you get the Bonus on June's deposit, or do you miss out on that portion of the bonus in the following anniversary year?

Terry_Towelling

Thanks for the comments - not shot down - just a flesh wound. Wasn't aware of the other thread that had this same process mentioned plus the other one of starting with £5K and building up.

I started that way but realised as you near £5500 the effective rate overall is down to around 1.4% ish. I can get 1.45% on my Birmingham Midshires account without doing anything, so I prefer to keep the NWB balance within the £5K tier and all else goes to other accounts & other regular savers.

Also in my example I have assumed the interest applied doesn’t count towards your balance uplift but I didn’t factor that in when talking of how much to take out and then replace. For sure, though, if there is ever a need to withdraw or if you can’t meet the £50 uplift, you should pull out all but £1 and then pay back in next month.

As for the interest cycle, it is a bit odd. For a deposit to count towards your balance in any given month it has to be received by COB on the 2nd last BD of the month. The interest cycle itself runs until the last calendar day of the month unless that is a Fri/Sat/Sun, in which case it runs until the next Business Day. Interest will be applied the calendar day after that.

NWB actually put all that in writing to me. They also sent me a spreadsheet of my own account since opening showing all of the start/end points and the tiered calculation columns. All v. interesting but it contradicted what they’d said because there were occasions where the last calendar day of the month was a Friday and the interest cycle should therefore have run until the Monday, but in their spreadsheet it ended on the Sunday – I have no idea why that should be.

glider3560

Fingerbobs wrote: »

What happens with the Ipswich Building Society Monthly Saver if the £500 incoming payment for the final month goes in before the anniversary date in the same month?

E.g. - The Anniversary date is the 9th June, but the incoming Standing Order is deposited on 6th June.

Do you get the Bonus on June's deposit, or do you miss out on that portion of the bonus in the following anniversary year?

In that case, you get the bonus on the £500 from 6th June until 9th June. After 9th June, you don't get the bonus on this £500.



Traditionally, I was paying in on the 1st. But with an anniversary date of the 10th, I was withdrawing it again within a few days. For the anniversary month only, I have moved the payment to after the anniversary date. Then it counts as a bonus eligible balance for almost a full year.

Fingerbobs

glider3560 wrote: »

In that case, you get the bonus on the £500 from 6th June until 9th June. After 9th June, you don't get the bonus on this £500.



Traditionally, I was paying in on the 1st. But with an anniversary date of the 10th, I was withdrawing it again within a few days. For the anniversary month only, I have moved the payment to after the anniversary date. Then it counts as a bonus eligible balance for almost a full year.

Thanks. Pretty-much what I'd guessed, although I hadn't expected to get the bonus on the £500 for the intermediate days up to the anniversary date.

Fingerbobs

glider3560 wrote: »

as paying in on the 1st. But with an anniversary date of the 10th, I was withdrawing it again within a few days.

Just out of curiosity, what withdrawal method do you use? I was quite taken aback to be told that there was a fee of £25 to transfer the funds directly to another bank account, so I took the only other option offered which was a cheque (apparently it was too much money to have as cash).

glider3560

Fingerbobs wrote: »

Just out of curiosity, what withdrawal method do you use? I was quite taken aback to be told that there was a fee of £25 to transfer the funds directly to another bank account, so I took the only other option offered which was a cheque (apparently it was too much money to have as cash).

Cheque.


When I opened the account, I was within their operating area (well, about 10 miles away from a branch) so I could get a cheque over the counter and pay it in elsewhere immediately. Now I live much further away, the only option is cheque in the post. They are fast at processing it and send the cheque by first class post.



I asked about Faster Payments or BACS, but apparently they don't offer it. Only CHAPS at a £25 fee.