Regular Savings Accounts: The Best Currently Available List!

Nick_C

Hoopra said:

Genuine question, sorry if it's something considered to be well known. Is it true that you lose two days interest when paying by DC?

On the YBS web site, if you type "When will I earn interest on a debit card payment?" The answer is "You will begin to earn interest on this deposit after 2 working days."

gt94sss2

Hoopra said:

Nick_C said:

schiff said:

Yorkshire Christmas

Additional advantage is deposits by debit card - helpful for the Halifax etc monthly £5 reward.

Yes, YBS allow deposits by Debit Card, but you lose two days interest (at 4.5% in this case).

To optimise the DC trick, deposit to an instant access saver towards the end of the month, and transfer to the higher interest RS at the start of the new month after the deposit has cleared.

Genuine question, sorry if it's something considered to be well known. Is it true that you lose two days interest when paying by DC?

I don't think it makes any difference that this is an initial deposit for a new account, I'd expect the same thing to happen for a regular monthly contribution made by DC too, and from what I can see there's no reason I'd expect interest not to start accruing from today (assuming that it's done by looking at the transaction date shown by YBS and that that date is treated the same whether it was a DC, SO or FP payment type).

Is there some reference somewhere that says anything different?

The table in Section 5/page 4 of the general YBS T&C at https://www.ybs.co.uk/documents/productdata/General_Terms_and_Conditions.pdf shows when interest starts to be earned depending on deposit method 

Band7

changearound1 said:

It doesn't make any difference which method you employ. Either way there are 2 days where the transferred money is earning 0% interest.

Exactly .

Nick_C

changearound1 said:

It doesn't make any difference which method you employ. Either way there are 2 days where the transferred money is earning 0% interest.

OK.  Let me rephrase that.  You are losing the opportunity to earn a full month's interest on the Regular Saver if you fund the account with a debit card.

You are not optimising the interest that you could be earning.

ForumUser7

I think Nick C's point is about maximising time funds in the RS are earning interest - i.e. if it becomes available in the easy access on for example the 31st, you could then internally transfer into the RS and earn interest on that deposit from the 1st of the month, rather than the 3rd or 4th

Band7

Nick_C said:

changearound1 said:

It doesn't make any difference which method you employ. Either way there are 2 days where the transferred money is earning 0% interest.

OK.  Let me rephrase that.  You are losing the opportunity to earn a full month's interest on the Regular Saver if you fund the account with a debit card.

You are not optimising the interest that you could be earning.

That makes more sense. Still only pennies, and plenty of oppty to forget to transfer on the right day, or to fall foul of month end processing issue.

In any case, my spare instant & unlimited access cash currently earns 3%, which is more than YBS or any other of the RS providers would pay me in an instant & unlimited access account.

changearound1

Nick_C said:

changearound1 said:

It doesn't make any difference which method you employ. Either way there are 2 days where the transferred money is earning 0% interest.

OK.  Let me rephrase that.  You are losing the opportunity to earn a full month's interest on the Regular Saver if you fund the account with a debit card.

You are not optimising the interest that you could be earning.

The penny has dropped. Apologies for my misunderstanding.

Hoopra

Nick_C said:

Hoopra said:

Genuine question, sorry if it's something considered to be well known. Is it true that you lose two days interest when paying by DC?

On the YBS web site, if you type "When will I earn interest on a debit card payment?" The answer is "You will begin to earn interest on this deposit after 2 working days."

Ah, OK, thanks. So it seems to be a YBS condition then. Definitely off topic now but relevant nevertheless - does anybody happen to know if this is an industry standard practice or whether it varies from one account provider to another - I know not all/many savings accounts can be funded by DC so perhaps the sample size is small for this particular context?

From this you'd have to guess that when YBS calculate interest on a daily basis they must look at the transaction date and also the transaction type. Given that they specify "working" days as well, if you deposit by DC on a Friday you'd lose out on a further two days and more if that included one or more bank holidays.

Seems to me on the face of it to be a little underhand given that as far as I can see the funds leave my account, are immediately unavailable and are credited as "cleared" funds instantly at the receiving end - at least that's the case for Revolut/Halifax. Fidelity permit instant trading against cash deposited by DC too.

According to the reference table provided by @gt94sss2 not only is interest deferred for two working days for deposits made by DC, but so are withdrawals. There is obviously some significant technical banking process difference here but it's not immediately easy to see why SO/FP should be treated differently and certainly no obviously complex clearing process like a cheque

Nick_C

Re Debit Card Deposits.  I believe it is standard industry practice.  Skipton BS state "Interest from debit card payments starts to accrue on the third working day, from and including the day on which a debit card payment is made into your account (if this is a working day)."  https://www.cambridgebs.co.uk/more/help-centre/faqs-and-guides/savings/paying-into-your-savings-account

TiVo_Lad

Hoopra said:

According to the reference table provided by @gt94sss2 not only is interest deferred for two working days for deposits made by DC, but so are withdrawals. There is obviously some significant technical banking process difference here but it's not immediately easy to see why SO/FP should be treated differently and certainly no obviously complex clearing process like a cheque

Au contraire. It's exactly what's happening. The transaction needs to clear between the acquiring and issuing banks and that isn't instant. It's the same reason why you have pending transactions in your current account when you use your credit/debit card in a shop/online. Therefore, if you make a deposit using a debit card, the money isn't phyiscally in the account that you've deposited in; you've merely authorised the transfer of funds. You don't get any interest because there's effectively no money in the account on which to pay interest until the transaction clears.