Regular savers, fixed term.

Robisere

In the MSE "Banking and Saving" Main site, there is no mention of the Halifax 1 year Fixed Term Regular Saver, paying 2%. Interest paid annually.

https://www.halifax.co.uk/savings/fixed-term/regular-saver/

Why is this? There are other 1year Fixed Savers, but none with a full 2% interest. If I have missed something here, please put me right.

colsten

MSE has never been a comprehensive source for all savings accounts. The MSE Forum, however, has a brilliant thread about regular savers and feeder accounts. Check the first couple of posts in
https://forums.moneysavingexpert.com/discussion/5776240/regular-saver-thread-new-and-restarted

Robisere

TY very much colsten, that is useful information and I have saved it.

ruperts

Because the Halifax account is a regular saver. The best regular savers pay 5%. If you want to compare it to a fixed term account, you have to halve the headline interest rate to account for the fact that each installment into the regular saver will get the full 2% but for a decreasing amount of time, until the final installment which will only get 2% for one month.

Zero_Sum

You have missed something. You need to learn the difference between fixed term & regular saver.

surreysaver

ruperts wrote: »

Because the Halifax account is a regular saver. The best regular savers pay 5%. If you want to compare it to a fixed term account, you have to halve the headline interest rate to account for the fact that each installment into the regular saver will get the full 2% but for a decreasing amount of time, until the final installment which will only get 2% for one month.

No, you don't halve the interest rate. 2% is 2%

eskbanker

surreysaver wrote: »

ruperts wrote: »

Because the Halifax account is a regular saver. The best regular savers pay 5%. If you want to compare it to a fixed term account, you have to halve the headline interest rate to account for the fact that each installment into the regular saver will get the full 2% but for a decreasing amount of time, until the final installment which will only get 2% for one month.

No, you don't halve the interest rate. 2% is 2%

Agreed - the 'halving the interest rate' myth is often posted (and quickly debunked) on here!

To me it's always much more realistic to consider regular saver interest as full interest rate times half closing balance (as this is the average balance over the term), rather than half interest rate times full closing balance - mathematically they product the same result but the former recognises and accepts the fact that 2% interest really does mean that (the pro rata equivalent of) 2% is always paid on whatever money is actually in the account at the time....

YorkshireBoy

ruperts wrote: »

The best regular savers pay 5%.

For new customers it's now just the one regular saver that's paying 5% APR...and that one won't last long!

surreysaver

eskbanker wrote: »

Agreed - the 'halving the interest rate' myth is often posted (and quickly debunked) on here!

To me it's always much more realistic to consider regular saver interest as full interest rate times half closing balance (as this is the average balance over the term), rather than half interest rate times full closing balance - mathematically they product the same result but the former recognises and accepts the fact that 2% interest really does mean that (the pro rata equivalent of) 2% is always paid on whatever money is actually in the account at the time....

Indeed. And don't forget the money that isn't in the regular saver yet will be somewhere else, in my case in other regular savers that mature every month to keep the cash flow going. Although, granted, when not sitting in a regular saver waiting for the first of next month, the money will be earning 1.5% whilst sitting in a feeder account.