Regular Savings Accounts: The Best Currently Available List!

Andover_3

I have been an regular saver for years and have taken the usual route of drip-feeding from one account into the higher interest earning regular account. However I have never really faced up to working out the true interest rate actually received. For example, say the lower account earns, 1.5% drip-feeding into the regular saver account of 4.0% over 1 yr with a monthly contribution of £250. Using those figures, the interest earned over the year can be slowly worked out with the monthly principle/interest of one decreasing whilst the regular saver is increasing. However, whenever money is moved from one account to another, particularly between different institutions, there is a 3-5 day period for clearance of funds. So obviously this has an effect over 12 monthly transfers. So the headline rate of 4.0% is reduced. Does anyone have any simple guidance or approximations in working out a final rate? If you only have one regular account, the hassle involved for the interest earned is questionable.

Milarky

Andover wrote: »

Does anyone have any simple guidance or approximations in working out a final rate? If you only have one regular account, the hassle involved for the interest earned is questionable.

I use the following for the typical 12 months-type of regular savers:

Interest earned = Total Amount Saved * (4% * 78/144 + 2.5% * 66/144)

Thus Average interest rate = Interest Earned/Total Amount Saved = (4% * 78/144 + 2.5% * 66/144)

which is also

TAS * [0.04*6.5 + 0.025*5.5]/12

Note that '78/144' + '66/144' = 1, just as '6.5 + 5.5' = 12 (which is then divided by 12)

With Faster Payment a reality it should not be necessary to allow for time 'in transit' any longer but if I were doing now this I would add 3 days on average for the BACS method (sometimes it crosses a weekend - other times its doesn't..)

The '3 days' average corresponds to about 1/10th of the average month. Thus the modified formula allows this as follows

TAS *[ 4% * (78- 12*0.1)/144 + 2.5% * 66/144 ]

That is '76.8/144' instead of '78/144'

I hope you can see where '78' has come from - it's '12' months for the first payment, plus '11' for the second, '10' for the third and so on..

The '144' is just 12 times 12 - because the period each payment is held for is in months - so we must divide by 12 to convert that to the number of years (since interest is expressed 'per annum')- and each payment only represents 1/12th of the total held - so its contribution to the balance - 'TAS' - is only 1/12th of that amount.

So the way to think about the problem is as a 'weighted sum'

goings from 2.5% 5.5/12ths of the time to 4% 6.5/12ths of the time - and the 'weights' used should always by complimentary - one being '1' minus the other

HTH

exel1966

ses6jwg wrote: »

I am a PBA for Santander.

The T&Cs state first payment is month after.

Thanks for the confirmation.

Such a shame though that 3 different people within Santander seem incapable of reading and understanding their own T&C's. It's no surprise that Santander customer services are continually knocked and the Santander brand name is regarded as a joke in many quarters.

kiebee

If I open a Northern Rock regular saver, will I be able to pay in cheques and request withdrawal by cheque via post, or will I have to visit a branch (as I have none locally)?

Thanks

ctdctd

kiebee wrote: »

If I open a Northern Rock regular saver, will I be able to pay in cheques and request withdrawal by cheque via post, or will I have to visit a branch (as I have none locally)?

Thanks

You can open the "statement" version of the account online or by phone but you can only pay in by electronic transfer (BACS, CHAPS, FPS or Standing Order). Withdrawals can be made by cheque.

If you want to pay in cheques you must open the "passbook" version and pay in at a branch.

Linky

HTH

Special_Saver2

Hi Everybody,

Here is this weekend's update:

- Nottingham BS Fixed Rate Regular Saver issue 2 account withdrawn (but the "Regular Saver" and First Home Saver are still available)

- Santander eSaver issue 3 (feeder account section) paying 3% AER withdrawn and replaced with issue 4 paying 2.75% AER

- Santander Private Banking regular saver (post 5) euro account version updated - the current leaflet shows that the amount you can put in this account is now 375 to 3,750 euros per month (up to a maximum of 20% of the amount you put in the Gold current account)

I will do another update next weekend.

SS2

Dagobert

Our Furness Monthly Savers will be maturing shortly.

I enquired about the maturity options:

• a new 3% regular saver £250 pm
• a 2.85% 1 yr fix for the matured funds
• withdrawal by cheque
• withdrawal by BACS (specify instructions in a letter)

Dagobert

Saffron Regular Saver maturing shortly.

As per their letter, they offer another 4% regular saver (£200 pm max, 4% as before).

You can ask them to take £200 of the matured funds to fund the new account. Specify in a letter.

Funds withdrawal per cheque to home address.

premierfella

+1 Dagobert.

I visited my local two staff Saffron agency last week (they recently closed the local branch and transferred to a new site as an agency) and was able to sort out closure of the matured account and opening of a new account within 10 minutes (whilst the other member of staff ordered their lunchtime pizzas!)

Special_Saver2

Hi Folks,

I cannot find anything that has changed in the world of regular savings accounts over the last week. I will do another update to this thread next weekend.

All the best,
SS2