A mix of current and quick access savings accounts - is there anything better for my situation?

wmb194

Both of Lloyds' regular savers - the £400pm 2.5% Club Lloyds Monthly Saver and £250pm 2% Monthly Saver - are instant access with no withdrawal fees.

Cmdr_Bond

wmb194 wrote: »

Both of Lloyds' regular savers - the £400pm 2.5% Club Lloyds Monthly Saver and £250pm 2% Monthly Saver - are instant access with no withdrawal fees.

The trouble with that is 2.5% AER on a monthly saver is equivalent to 1.25% AER on a lump sum invested for 12 months.

Both Santander and Lloyds are offering 2.5%...

Lloyds says "if you deposit!£100.00!every month for!12 months!you will have a balance of!£1215.00!after interest is paid."

That's £15, which is 1.25% of £1,200

Santander say If you pay in £200 per month for the full 12 months and make no withdrawals, you'll get back what you paid in plus up to £32.16

That's 1.34% of £1,200 - I'm presuming the £2.16 is down to variable rates and/or fares interest accrued. Otherwise it's practically £15/year per £100/month

So, 1.5% of the same is £18/year per £100/month.

The AER of a regular saver needs to be above 3% to make it competitive by my calculations.

YorkshireBoy

Cmdr_Bond wrote: »

The trouble with that is 2.5% AER on a monthly saver is equivalent to 1.25% AER on a lump sum invested for 12 months.

Both Santander and Lloyds are offering 2.5%...

Lloyds says "if you deposit!£100.00!every month for!12 months!you will have a balance of!£1215.00!after interest is paid."

That's £15, which is 1.25% of £1,200

Santander say If you pay in £200 per month for the full 12 months and make no withdrawals, you'll get back what you paid in plus up to £32.16

That's 1.34% of £1,200 - I'm presuming the £2.16 is down to variable rates and/or fares interest accrued. Otherwise it's practically £15/year per £100/month

So, 1.5% of the same is £18/year per £100/month.

The AER of a regular saver needs to be above 3% to make it competitive by my calculations.

You're falling into a common trap! You have a £20K lump sum remember.

Now if you drip feed a 2.5% regular saver from a 1.5% savings account what's your aggregate interest on the whole amount? Answer is (slightly over) 2%.

Now do that with 5 or 6 regular savers and the whole £20K is making an aggregate 2%.

Cmdr_Bond

Ahhh...

Thank you.

colsten

Regular Saver calculator: https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/#calculator

Spiggle

Cmdr_Bond wrote: »

Well, it looks like the Santander 123 could well be an option!

Cashback on bills alone exceeds the monthly fee if I switch all the ones that are eligible.

Hi again,

I live alone now so my costs are lower per mth but I am yet to have to 'pay' for the Sant123 as my cashback (as yet) has never been below and normally exceeds the £5 fee. So interest plus a few pennies of cashback too from just paying my bills through DD. Seems a no brainer to me.;)

Any cash excess over the £20k just gets sent over to Marcus, easy as pie!

Should also note that this is for a relatively small number of bills, i.e. no Sky/Virgin/etc just my water, council tax, landline (inc broadband), mobile and energy suppliers.

Hope that helps,
Spigs

colsten

Spiggle wrote: »

I live alone now so my costs are lower per mth but I am yet to have to 'pay' for the Sant123 as my cashback (as yet) has never been below and normally exceeds the £5 fee. So interest plus a few pennies of cashback too from just paying my bills through DD. Seems a no brainer to me.;)

Why are you not using the 123 Lite for the cashback? Is it because it's too much faff to have the right amount of money at the right time available in that non-interest-paying account?

Spiggle

Cmdr_Bond wrote: »

…
Lloyds says "if you deposit!£100.00!every month for!12 months!you will have a balance of!£1215.00!after interest is paid."

That's £15, which is 1.25% of £1,200

Santander say If you pay in £200 per month for the full 12 months and make no withdrawals, you'll get back what you paid in plus up to £32.16
…

I may have read this wrong (its been a long day!) but you seem to be comparing a £100 per mth pay in with a £200 per mth pay in to a regular saver.

Or perhaps I should just shut my computer down!!!:o

All the best,
Spigs

Spiggle

colsten wrote: »

Why are you not using the 123 Lite for the cashback? Is it because it's too much faff to have the right amount of money at the right time available in that non-interest-paying account?

Sorry Colsten,

Yes it probably is!

I am in the process of de-cashing and learning about investing more but I'm still wedded to bank accounts to some extent. I have lots of other cash fixed period accounts maturing last month and this and so have been concentrating on sorting those out for the moment. I'll take a look at 123Lite once I'm straighter elsewhere.

All the best,
Spigs

colsten

Spiggle wrote: »

Sorry Colsten,

Yes it probably is!

I am in the process of de-cashing and learning about investing more but I'm still wedded to bank accounts to some extent. I have lots of other cash fixed period accounts maturing last month and this and so have been concentrating on sorting those out for the moment. I'll take a look at 123Lite once I'm straighter elsewhere.

No need to apologise, I was just asking because you seem to be one of the few who are still having a full-fat 123. I am another one of these . and haven't yet found a good reason for moving to the 123 Lite. I have plenty of DDs and SOs coming out at different times of the month, and would have to either rationalise all those to one or two dates, or have money sitting in the 123 Lite earning no interest. My rationale for keeping the full-fat one is that a couple of mishaps could quickly cost me more than the £48 a year I would save by downgrading to Lite. As and if Santander drop the interest rate further, I would most likely take action, though.