Are Regular Savers worth it?

Steven.Still

Reaper wrote: »

I think we will need the full details. How much currently in each and how long left to run because something still doesn't add up.

It doesn't explain it all but one detail you seem to have missed is you are not comparing like with like. You appear to be comparing putting £900pm in regular savers with putting £1000pm in a standard savings account.

So, HSBC RS @ 2.75% currently has £750 in and matures Nov 20. Lloyds RS @2.5% currently has £1200 in and matures Dec 20. Virgin RS @ 2% currently has £250 in and matures Dec 20. This should give a total of £10686.65 by Dec 20, as worked out by MSE calculator.

If I took that total of £2200 and put it in to the easy access at 1.36%, topping up by £1000 each month, MSE says that by Dec 20 I'd have £13302.66.

I am a complete novice at this, so I thank you for your advice, however I can only go by what the calculation tells me. If I'm wrong I am more than happy to be educated!

abz88

Steven.Still wrote: »

Okay, this may add clarity as I wasn't clear earlier:

The total I can have in all 3 RSs over the time they have left is £10686.65. Calculation taken from MSE calculator.

If I took the £2200 that I have in all three now, closing them and put it in to the easy access saver, adding in an extra £1000 a month to that account, the MSE calculator says that over the same period until the RSs would have ended, I'd have £13302.66

So the calculations say I'd be better off doing that!

As others have pointed out, your calculations are wrong and/or you are using the MSE calculator wrong.

You have £2,200 in the three RS now, are you remembering that you will be adding to that every month out of the extra £1000 and that your additional £100 can go to another RS?

Some very basic maths to consider based on your RS and interest rates:

- 250 * 12 months at 2.75% will pay roughly £41.25
- 400 * 12 months at 2.5% will pay roughly £60
- 250 * 12 months at 2% will pay roughly £30
- Total interest is £131.25
(This is before you add in another possible £100 a month into a RS giving another £12 is you assume 2% RS)

- 2,200 (total in your RS just now) + 900 a month for 10 months (to account for the time left of RS and max payable amounts) at 1.36% gives you roughly £91.12 (1.36% is paid on the 2,200 for 10 months and then 900 is drip fed for 10 months).

Are you calculating the interest of 1.36% based on the full amount you will have in it at the end of the year or are you factoring in that you will be adding 900/1000 a month to it which results in a lower interest value being paid as you cannot earn money that is yet to go into your account?

Steven.Still

LobsterMemory wrote: »

Looks like

1/ You're not including the #2200 in the 1st calculation
2/ You're not including the #100 per month in the first calculation - treat it as another regular saver at 1.36%
3/ You may be counting the #2200 twice in the 2nd calculation - you aren't using it to fund your regular savings

So forget about the #2200
Work out interest on the #100 per month and add it to the previous figure

Compare it with a regular saver at #1000 per month at 1.36%

Thanks. The MSE savings calculator asks how much you currently have, so I, on the thought process of moving it to the easy access account, said £2200 (total in all RSs), then it asks how much can you save per month, so I put in £1000. Feb to Dec is 11 months. Interest of 1.36%. That gave me a total of £13302.66.

I'm struggling to see how the calculator is giving me that figure when over the same period, not including the £2200, but carrying on the RSs for their full terms, only gives £10686.65

Steven.Still

abz88 wrote: »

As others have pointed out, your calculations are wrong and/or you are using the MSE calculator wrong.

You have £2,200 in the three RS now, are you remembering that you will be adding to that every month out of the extra £1000 and that your additional £100 can go to another RS?

Some very basic maths to consider based on your RS and interest rates:

- 250 * 12 months at 2.75% will pay roughly £41.25
- 400 * 12 months at 2.5% will pay roughly £60
- 250 * 12 months at 2% will pay roughly £30
- Total interest is £131.25
(This is before you add in another possible £100 a month into a RS giving another £12 is you assume 2% RS)

- 2,200 (total in your RS just now) + 900 a month for 10 months (to account for the time left of RS and max payable amounts) at 1.36% gives you roughly £91.12 (1.36% is paid on the 2,200 for 10 months and then 900 is drip fed for 10 months).

Are you calculating the interest of 1.36% based on the full amount you will have in it at the end of the year or are you factoring in that you will be adding 900/1000 a month to it which results in a lower interest value being paid as you cannot earn money that is yet to go into your account?

That may be what I am doing but I was under the impression that because the calculator tool specifically asks about a lump sum payment AND monthly payments in to one account, it takes in to account that you will not have the total in there until the end of the year, or however long you ask it to calculate over.

grumiofoundation

Steven.Still wrote: »

Thanks. The MSE savings calculator asks how much you currently have, so I, on the thought process of moving it to the easy access account, said £2200 (total in all RSs), then it asks how much can you save per month, so I put in £1000. Feb to Dec is 11 months. Interest of 1.36%. That gave me a total of £13302.66.

I'm struggling to see how the calculator is giving me that figure when over the same period, not including the £2200, but carrying on the RSs for their full terms, only gives £10686.65

Are you using the MSE savings calculator rather than the regular savings calculator?

Using mse regular savings calc (drip feeding)

With a lump sum of 12000 in account paying 1.35% drip feeding 900 pcm into regular savers @2.4% (rough average) gets you £223 in interest

leaving 12000 in the 1.35% account gets you £162 in interest.

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

Alternatively if you don't have the lump sum at the beginning
The interest on savings £900 pcm @ 2.4% must be greater than interest on savings £900 pcm at 1.35% (in reality ~141 versus ~78).