Regular Savings Account - First of the Month?

KieranMac

Hi all,

I'm about to open Flex Regular Online Saver with Nationwide.

I'm just wondering is all I need to do to maximise the interest earned after the 12 months is to:

- Pay in the max amount each month (£250)
- Pay into the account on the first of each month
- Don't withdraw any money from the account

Is there anything else?

Thank you!

webjaved

I don't think you need to pay into the account on the first of each month - anytime within the month should be fine?

If I'm wrong, I'm sure someone will correct me. It'll be useful to find out from someone that has been with Nationwide for a while. I've just recently joined and opened up Flex Regular Online Saver account.

Voyager2002

webjaved wrote: »

I don't think you need to pay into the account on the first of each month - anytime within the month should be fine?

If I'm wrong, I'm sure someone will correct me. It'll be useful to find out from someone that has been with Nationwide for a while. I've just recently joined and opened up Flex Regular Online Saver account.

You only earn interest on money that is in the account, so if you pay in later in the month you will earn less than if you pay in on the first.

ColdIron

I assume you already have a qualifying Nationwide current account

As this account operates on a calendar month basis you will make a little more money if you open the account and make your first payment close to the end of the month and then make the subsequent 12 payments (so 13 in all) on the first

LXdaddy

I THINK that Nationwide takes all subsequent payments on the same day as the anniversary of the first payment so it doesn't matter which day of the month you use.

BUT if you can choose which day to make subsequent payment then yes you can make more interest by opening late in the month and making subsequent payments early in the month.

ColdIron

LXdaddy wrote: »

I THINK that Nationwide takes all subsequent payments on the same day as the anniversary of the first payment so it doesn't matter which day of the month you use.

No. It operates on a calendar month basis

• You don't have to deposit each month, but the maximum you can increase your balance by each calendar month is £250.

https://www.nationwide.co.uk/products/savings/flex-regular-online-saver/features-and-benefits

EarthBoy

LXdaddy wrote: »

I THINK that Nationwide takes all subsequent payments on the same day as the anniversary of the first payment so it doesn't matter which day of the month you use.

Nationwide doesn't "take" any payments, you have to make them yourself, either by standing order or individual deposits.

KieranMac

Thanks for the replies above, however I'm still a little confused...

I just want to maximise the interest I get after the year is over, so if it varies lots depending on the day it would be good to know

Cheers again!

pafpcg

KieranMac wrote: »

I just want to maximise the interest I get after the year is over....

The maximum interest that can be earned is achieved by:

1. Open the regular saver account in the last few days of the month,* and making your first of the £250 monthly payments.
2. On the first day of the following months, make your £250 monthly payment.
3. On the anniversary of the account opening, interest will be credited to the account. Transfer funds and close the account.
4. Repeat from Step 1.....

* If you open the account early in the month, you'll get slightly less interest (but it's only a matter of pence). Nationwide allow you to make each month's payment on the 1st.

etienneg

KieranMac wrote: »

Thanks for the replies above, however I'm still a little confused...

I just want to maximise the interest I get after the year is over, so if it varies lots depending on the day it would be good to know

Cheers again!

Don't confuse "earning the most interest IN THIS ACCOUNT" and "best thing to do for maximum return".

A regular saver such as this runs for one year from the date of opening. You maximize the interest earned IN THIS ACCOUNT over that year by having the highest balance for the longest possible time. So, as has been said in previous posts, you achieve this by opening the account (and making the first deposit) late in a calendar month and then making subsequent deposits on the first of subsequent months.

However, as we are already in April, your choice is to open immediately or wait for almost a month before getting going to pursue maximum interest IN THIS ACCOUNT. If you wait, you miss the opportunity to earn any interest for almost a month. It will be almost 13 months from now before the interest is paid (and you can go on to spend or compound it), rather than 12 if you go ahead now.

In other words, when you use the phrase "after the year is over", be aware that your options cover two different years. Don't just concentrate on maximizing interest IN THIS ACCOUNT.

In any case, the difference is small so you might just as well get on with it now.

eskbanker

pafpcg wrote: »

If you open the account early in the month, you'll get slightly less interest (but it's only a matter of pence). Nationwide allow you to make each month's payment on the 1st.

I'd say rather more than just pence - the variation in interest from optimally-scheduled to worst-timed is effectively a year's interest on an extra month's payment, so roughly 5% of £250 = £12.50, or perhaps a shade below this, closer to £12.

This is on the basis that by starting at the very end of the month and then making a second payment on the 1st of the next month, the balance for the vast majority of the first monthly period is £500, then £750 for most of the second, and so on up to £3,250 for the twelfth.

If funding on the 1st, the first month's balance is £250, then £500 for the second and so on up to £3,000 for the twelfth, so the gap between the two is £250 throughout the year.