How many Regular Savings Accounts do you have?

JohnRo

EachPenny wrote: »

TFor 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?

I don't know the contribution limits on Virgin's RS account but in isolation the obvious answer is that any deposit account which pays an annual rate on the total amount, which the RS throttles, that results in a net interest paid gain.

£250 a month on 2.5% AER pays about £35

£250 x 12 = £3000 so anything at about 1.2% beats that RS.

JohnRo

EachPenny wrote: »

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

You're not doing yourself any favours.

EachPenny

JohnRo wrote: »

I don't know the contribution limits on Virgin's RS account but in isolation the obvious answer is that any deposit account which pays an annual rate on the total amount, which the RS throttles, that results in a net interest paid gain.

£250 a month on 2.5% AER pays about £35

£250 x 12 = £3000 so anything at about 1.2% beats that RS.

Except that unless you are keeping the rest of your money under the matress, the funds which aren't yet in the Virgin RS will be earning interest (at the best rate you can get).

In the case of Virgin, that could be another Virgin RS account, also earning 2.5%

EachPenny

JohnRo wrote: »

You're not doing yourself any favours.

People who know the bank I'm talking about will know what I mean. :money:

JohnRo

EachPenny wrote: »

Except that unless you are keeping the rest of your money under the matress, the funds which aren't yet in the Virgin RS will be earning interest (at the best rate you can get).

In the case of Virgin, that could be another Virgin RS account, also earning 2.5%

This is getting starnger and stranger, why would you put anything in a 2.5% RS that can otherwise be earning more interest in a regular deposit account, on an annual basis, that offers something close to half the RS headline interest rate on the whole amount for the whole year.

IanManc

JohnRo wrote: »

You're not doing yourself any favours.

Really? From the person who sarcastically started post #134 with "Well done"? :sad:

IanManc

EachPenny wrote: »

Except that unless you are keeping the rest of your money under the matress, the funds which aren't yet in the Virgin RS will be earning interest (at the best rate you can get).

In the case of Virgin, that could be another Virgin RS account, also earning 2.5%

You beat me to it Eachpenny!

The Virgin RS online accounts are especially useful with their instant access. I hope they issue another one.

Last week I was in a shop and I asked the member of staff who was on the till whether they were bringing out another issue, and she said that the staff hadn't been told yet.

EachPenny

JohnRo wrote: »

This is getting starnger and stranger, why would you put anything in a 2.5% RS that can otherwise be earning more interest in a regular deposit account, on an annual basis, that offers something close to half the RS headline interest rate on the whole amount for the whole year.

Because every day that £1 is sitting in an account earning 2.5% interest, rather than a standard account paying half that amount, means you earn more interest on that pound overall.

It doesn't matter if it is only there for 28/30/31 days - it will still earn you more interest than if you left it languishing in the standard account.

gingercordial

JohnRo wrote: »

I don't bother with anything 'regular saver' that's less than a 3% headline rate.

But when I've maxed out all of the high-interest current accounts where else should I put my money to do better than that? I want to buy a house in 12-18 months and so can't lock it up long-term or invest in shares. So my 3.36% average on regular savers (broadly speaking a mixture of those paying at 5% and those paying at 2.5%) is the best I can do in my own current circumstances.

If I were to "let go" of all the ones which are at 2.5% and only keep the ones at 5%, OK my weighted average interest rate would go up, but where am I going to put the contributions I'm making to the 2.5% set to make that money work for me?

Personally I don't really bother with ones at less than 2% because at that level it's better off going into a cash ISA (I'm a higher rate taxpayer and easily exceed the £500/year tax-free limit), but that threshold of being "worth it" will be different for everybody.

Ogordo

Surely £3000 being rotated around 12 x 2.5% RS accounts as they mature mean that you're getting 2.5% over the whole year on all of that money? Or am I missing something?