Regular saver vs other accounts

littlemoney

Are regular savers still worth it? With rates so low for regular saving account especially are not many allow a drip feed from another saving account, if you have a lump sum which you may not need for a year are you better off with the money in either

1. Easy access. I have a 1.5% rate account still in use

2. Notice account and give due notice just before one year such as ICIC bank

3. 1 year account such Habib bank Zurich


I am trying to work out how much interest I need to get from any other account to match a regular saver account to see which gives the better return over 1 year.

YorkshireBoy

Option 4: Use a (higher interest) regular saver that allows penalty free withdrawals or indeed early closure.

bigadaj

The will be a benefit and it's a personal opinion as to whether it's worth the effort. Depending on the sums involved it's likely to be a few tens of pounds per year per regular saver.

You'd obviously leave the balance of the lump sum in a high interest account whilst you drip feed into the regular saver so ten iver all rate will be a blend of the two accounts rate.

If you are confident you don't need the money for a fixed period, and just w at to leave alone then a fixed term savings account may be preferable.

Ken68

Thought to pack up Regular Savers but with lowering fixed year rates it seems that 2%'ers are worth pursuing.Lots of them.

18cc

Clearly regular savers produce more interest than instant access accounts - that is simple mathematics.

Is this extra interest worth the extra hassle? Purely a personal decision....

I personally have decided that it's not.

YorkshireBoy

18cc wrote: »

I personally have decided that it's not.

Even though a great many of them have FIXED rates? I wonder if you'll regret the decision if such as Marcus et al cut their VARIABLE rates soon (and regular saver rates are similarly cut)? That's the thought process that's made me continue with the 2% offerings.

Stargunner

I find the problem with the regular savers is that you only get the advertised rate for the year on your first monthly payment because the 2nd payment is only in there for 11 months and the 3rd for 10 months and so on. So if they advertise 3% you only effectively get 1.5% on the whole amount. May as well just leave it in the Marcus.

YorkshireBoy

Stargunner wrote: »

I find the problem with the regular savers is that you only get the advertised rate for the year on your first monthly payment because the 2nd payment is only in there for 11 months and the 3rd for 10 months and so on. So if they advertise 3% you only effectively get 1.5% on the whole amount. May as well just leave it in the Marcus.

Stick around for the maths lesson that will surely follow.

ColdIron

Stargunner wrote: »

I find the problem with the regular savers is that you only get the advertised rate for the year on your first monthly payment because the 2nd payment is only in there for 11 months and the 3rd for 10 months and so on. So if they advertise 3% you only effectively get 1.5% on the whole amount. May as well just leave it in the Marcus.

No, you will be paid the advertised rate on every penny in the account. This old chestnut comes up regularly. You are not the first person and certainly won't be the last to make this mistake. Rather than thinking of it as half the rate on the full amount it is more helpful to frame it as the full rate on the average balance (just over half the balance at the end of the term). If you can find an account that pays the full rate on money that is not (and may never be) deposited in the account let us know, I'm sure it would be wildly popular

If you just leave it in Marcus you will be worse off. Don't believe me? Try the RS calculator. Use the drip feed option
https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/#calculator

quirkydeptless

Stargunner wrote: »

I find the problem with the regular savers is that you only get the advertised rate for the year on your first monthly payment because the 2nd payment is only in there for 11 months and the 3rd for 10 months and so on. So if they advertise 3% you only effectively get 1.5% on the whole amount. May as well just leave it in the Marcus.

Stargunner

Yes I know you get the advertised rate but if you paid in £250 per month (£3000 for the year) it only works out that about half of it has been in thre for a year. I may as well leave the £3000 in a Marcus account.. Obviously it is different for people that don’t already have the funds in savings and are making their payments from the monthly earnings.