The Top Easy Access Savings Discussion Area

murphydavid

Consumerist said:

I-LOV-MONEY said:

Consumerist said:

If you don't already have a lump sum to save, you get the full headline rate on a month by month basis.

I didn't have a lump sum available to invest at the time, so I wasn't losing anything by using a regular saver or three.

It is probably me   but surely you would only get the full headline rate on the money that has been in the account for 12 months, ie the first month's investment.  Each subsequent investment would get a reducing percentage of the headline rate.    Unless 1/12th is a better rate than you can get on any other type of investment.   I suppose one could argue that the rate you receive until say, month 8, is better than other products.

But if I can only afford to add, say, £100 pm to my savings then I would get just the same interest as I would in an ordinary savings account at the same annual rate.

I don't like %age talk I like to think in real money.
Putting it together. £100/m saved at 2.1% nets you   £13.74 for the lifetime of the account. (first year).
So if you then re applying and the rate remains the same you can start again but now you can save £200 a month. and net £27.48 
 

Consumerist

murphydavid said:

I don't like %age talk I like to think in real money.

That could be a mistake. In my view, for what that's worth, AER is king, all other things being equal.

I don't quite follow where the £200 pm came from when you start again.

polymaff

Consumerist said:

murphydavid said:

I don't like %age talk I like to think in real money.

...  AER is king ...

I agree, the misunderstandings about Regular Savers surfaces regularly, but in the end, all you have to look at is the AER.

If you fund an RS from RI (Regular Income) you DO get the RS AER.  If you are drip-funding an RS from some other interest bearing account, then the interest achieved is about the average of the two accounts - which, by definition, cannot be lower than the lower of the two AERs involved.

Why are rates for RSs generally higher than Easy Access? For historical reasons. Save As You Earn was a scheme favoured by the government at that time as a means of encouraging savings - as could also, later, be said of cash ISAs.  Both paid higher than expected rates - until the institutions realised they were being played for mugs.

Primarily by their own marketing staff. Loss-leaders and all that guff. ...

Consumerist

polymaff said:

. . . Why are rates for RSs generally higher than Easy Access?

Although this was probably a rhetorical question, I suspect it's because banks etc. can limit their exposure to interest payments whilst tempting in new customers who can be approached to buy other financial services in the longer run.

There's no reason why we can't take advantage of the opportunity it presents.

I-LOV-MONEY

Ha.  I have just seen a 'problem' with the Regular Savers accounts.   M&S require you to switch your banking to them.  I have no wish to do so - so that probably makes me ineligible.   HSBC say a 'current account' with them.  Can I open an account, with say £5 and just leave it there?   First Direct want you to have another product with them.  I already have an account with them1

polymaff

Consumerist said:

polymaff said:

. . . Why are rates for RSs generally higher than Easy Access?

Although this was probably a rhetorical question, I suspect it's because banks etc. can limit their exposure to interest payments whilst tempting in new customers who can be approached to buy other financial services in the longer run.

There's no reason why we can't take advantage of the opportunity it presents.

Mmm. Well that's why I mentioned marketing.  I've chatted with managers in the various institutions and, except for Virgin, they all reckoned that the idea - get them in with a loss-leader then sell them other products - was very out-of-date.

One of them mentioned the word "Vultures"

I think that he meant us. ...

RG2015

I-LOV-MONEY said:

Ha.  I have just seen a 'problem' with the Regular Savers accounts.   M&S require you to switch your banking to them.  I have no wish to do so - so that probably makes me ineligible.   HSBC say a 'current account' with them.  Can I open an account, with say £5 and just leave it there?   First Direct want you to have another product with them.  I already have an account with them1

1) M&S. Yes, you need to switch.
2) HSBC. Yes, I keep £1 in my HSBC account
3) First Direct. No problem you are already eligible and will get 2.75% and in 12 months you will have a lump sum of about £3,653. 

Eco_Miser

I-LOV-MONEY said:

Ha.  I have just seen a 'problem' with the Regular Savers accounts.   M&S require you to switch your banking to them.  I have no wish to do so - so that probably makes me ineligible.   HSBC say a 'current account' with them.  Can I open an account, with say £5 and just leave it there?   First Direct want you to have another product with them.  I already have an account with them1

Read the forum, you'll find it all discussed many times. M&S do not require you to switch your banking to them, they require you to switch a current account to them. There's a difference.

HSBC are a bit fussy about who they allow to bank with them, but in theory you could indeed just bung £5 in and leave it.  Many have done just that with First Direct to qualify for waiver of fees (I think they've dropped the fees now).

Many of the RSs and interest paying Current Accounts (when they were worthwhile) had requirements which were much less onerous than they first appeared - if you applied lateral thinking to the letter of the T&Cs, or just carefully read the relevant threads on MSE forums.

Consumerist

I-LOV-MONEY said:

Ha.  I have just seen a 'problem' with the Regular Savers accounts.   M&S require you to switch your banking to them.  I have no wish to do so - so that probably makes me ineligible.   HSBC say a 'current account' with them.  Can I open an account, with say £5 and just leave it there?   First Direct want you to have another product with them.  I already have an account with them1

It is true to say that the 'best buys' tend to come with strings attached. I, personally, have avoided them like the plague.

Others are available but pay less. I don't know what their current rates are but some suggestions are Coventry BS and Virgin Money. I already had a Lloyds account so that was a given for me.

Sadly, the good ones tend to go quickly.

polymaff

Eco_Miser said:

I-LOV-MONEY said:

Ha.  I have just seen a 'problem' with the Regular Savers accounts.   M&S require you to switch your banking to them.  I have no wish to do so - so that probably makes me ineligible.   HSBC say a 'current account' with them.  Can I open an account, with say £5 and just leave it there?   First Direct want you to have another product with them.  I already have an account with them1

M&S do not require you to switch your banking to them, they require you to switch a current account to them. There's a difference.  Just annual will do.

You just beat me to that point. Another plus about M&S is that direct debits do not have to be monthly ones. Once a year will do.