How many Regular Savings Accounts do you have?

IanManc

Cornucopia wrote: »

When you have one or two, no it doesn't. The more you have, and the more staggered they are, the better the true rate becomes... I think. It also depends on the rate you are receiving on your feeder account(s).

Yes it does - whether you have one, two or the seventy seven that is the largest number quoted on here so far.

JohnRo

Well done,

The issue is that an annual rate grabs the headline when in fact the contributions are throttled by a monthly cap such that a tiny fraction of the sum contributed annually returns the headline rate.

Within any one year a 5% regular saver returns about half that amount on the sum contributed.

I have no problems with the numbers it's the marketing I object to, it's disingenuous.

Wheres_My_Cashback

JohnRo wrote: »

Well done,

The issue is that an annual rate grabs the headline when in fact the contributions are throttled by a monthly cap such that a tiny fraction of the sum contributed annually returns the headline rate.

Within any one year a 5% regular saver returns about half that amount on the sum contributed.

Does it ? Are you sure? I believe it does what it says in the advertising and gives you a full 5% on every single penny for each day it's saved

soulsaver

Wheres_My_Cashback wrote: »

Does it ? Are you sure? I believe it does what it says in the advertising and gives you a full 5% on every single penny for each day it's saved

No, but it does .. give you a full 5% per annum on every single penny for each day it's saved..

EachPenny

JohnRo wrote: »

The issue is that an annual rate grabs the headline when in fact the contributions are throttled by a monthly cap such that a tiny fraction of the sum contributed annually returns the headline rate.

Within any one year a 5% regular saver returns about half that amount on the sum contributed.

I have no problems with the numbers it's the marketing I object to, it's disingenuous.

The whole of the sum contributed earns the headline rate for the length of time it is deposited in the account.

The error is with people thinking they should be paid interest on money they have not yet deposited.

Which leads us to to the advantage of having multiple RS accounts - even if you cannot fully fund them all - because it means more of your deposits are earning 'headline' rates for more of the time.

For example, by ignoring Virgin's accounts paying 2.5% (because they are %) where are you earning >2.5% on the money which will later be funding the RS accounts that you do have?

JohnRo

Wheres_My_Cashback wrote: »

Does it ? Are you sure? I believe it does what it says in the advertising and gives you a full 5% on every single penny for each day it's saved

Every day it earns 5% AER.. therein lies the issue. How many days the contributions are offered that annual equivalent rate before the offered rate reverts to something close to zero.

soulsaver

JohnRo wrote: »

Every day it earns 5% AER.. therein lies the issue. How many days the contributions are offered that annual equivalent rate before the offered rate reverts to something close to zero.

No issue for people who understand that banks/bs don't pay you interest on money that you haven't deposited...

EachPenny

JohnRo wrote: »

Every day it earns 5% AER.. therein lies the issue. How many days the contributions are offered that annual equivalent rate before the offered rate reverts to something close to zero.

At which point you immediately pull the money out and move it elsewhere. No different than a fixed-rate account which offers a very attractive 'headline' rate but drops to something closer to zero at maturity.

Willing2Learn

JohnRo wrote: »

Every day it earns 5% AER.. therein lies the issue. How many days the contributions are offered that annual equivalent rate before the offered rate reverts to something close to zero.

This is all about money management. Why would I keep the money in a matured account when I can just open another RS account?

EachPenny

soulsaver wrote: »

No issue for people who understand that banks/bs don't pay you interest on money that you haven't deposited...

Er, I can think of one which might. :whistle:;)