Regular Saver or Easy Access Saver

Steven.Still

Hi!
I can't work out which is best for my money (I do understand completely how regular savers and easy access savers work).

I am fortunate enough to be able to save around £1150 per month, which I have been doing in to 3 separate regular savers achieving between 2.75-2.5% each. I am able to max each RS each month, and have been for around 4 months now. I also have an Easy Access Savings account at 1.36% which currently has just under £4000 in. My problem is that while RS are great, there comes a point that you have a certain amount of cash saved and being added to that by closing the RS and putting it all in the lower interest % account that beats the combined earning power of the RS. I think I am near or past that point now, but how do I confirm to see which is actually best?

Poor_Leno

Best RS's :

m&s monthly saver (2.75%) pay in up to £250 pm (need the current account to open)
First Direct regular saver (2.75%) pay in up to £300 pm (need the current account to open)
HSBC regular saver (2.75%) pay in up to £250 pm (need the current account or premier account to open)
Coventry BS (2.5%) pay in up to £500 pm (open to all
Also, if you are near Essex then Saffron BS offers 3% on its RS.  You can also open it by post from a postcode outside Essex if you are an existing customer of at least 9 or 12 months (its something like that).


The thing to do once they mature is to drip feed that cash each month from the top paying easy access account and open RS's that are paying a rate that is at least ABOVE the rate of your easy access saver.  This way you are always beating your easy access rate, and getting the double benefit of interest being paid on the money in the easy access account while it is being fed into those other RS's where you'll get interest added to those on maturity. 

My advice is to keep paying from your salary into the top paying RS's, and then after that use the lower rate ones to drip feed your 'pot' from.  Even the likes of TSB, Virgin and Principality have RS's paying a rate of 2%.  Which is not as good of course, but they're ideal for drip feeding your matured RS's into and beating the rate of that easy access.

Hope that helps?

wiseonesomeofthetime

The advice of @Poor_Leno is exactly what I am doing at the moment.

Hope they can't see my accounts 😂🤣 😂🤣 😂🤣

Steven.Still

Poor_Leno said:

The thing to do once they mature is to drip feed that cash each month from the top paying easy access account and open RS's that are paying a rate that is at least ABOVE the rate of your easy access saver.  This way you are always beating your easy access rate, and getting the double benefit of interest being paid on the money in the easy access account while it is being fed into those other RS's where you'll get interest added to those on maturity. 

So I have the HSBC and Coventry BS ones and also a Lloyd's RS at 2.5%. I get the process of drip feeding, but my own personal preference is to have the money currently in the EAS  available as a "just in case" fund should I need it, and not deplete it by drip feeding in the hope that I wont need it before the RS matures.

So this brings me back to the thinking that, if making money through interest gain is the game, I'd be better off now closing the RS and combining the funds completely in to the EAS. Even at the lower rate there will come a time that it pays more than the RS combined. If I did the above, that would see £7500 roughly go in to the EAS as well as the £1150pcm additionally being added. I just don't know how to work out when the point is that it would pay more in the EAS. The calculations I've done seem to suggest I am at that point but I'm often wrong with things like this! 😂

Poor_Leno

Well, if you think you will need the money sooner than within 12 months of drip feeding to other RS's, I would just keep it in the top paying easy access account...or at least an amount of money that is enough for you to be comfortable about.  It comes down to personal preference / circumstance really.  Oh, and don't forget, even though TSB is dropping the rate on its current account that pays 3% interest on up to a £1,500 balance (down to 1.5%) its worth keeping £1,500 in there just cos that is beating almost all easy access rates around.  You would need to shunt £500 each month from your current account into the TSB account (and then back again) as that account does have a £500 pm minimum pay in.  I think you have to sign up to paperless documents too.  Only a year ago that account was paying 5%.  Sad times, but if it beats an easy access account, then its still worth it (just) to keep 1500 in there.  Plus, kinda worth opening anyway if the 2% RS of there's might be of interest to you.

YorkshireBoy

Your emergency fund is what's in the instant access savings account at any point in time.
If that isn't enough then either raid the penalty free regular savers (isn't Club Lloyds one such product?) or use a 0% credit card.

LobsterMemory

Steven.Still said:

there comes a point that you have a certain amount of cash saved and being added to that by closing the RS and putting it all in the lower interest % account that beats the combined earning power of the RS. 

Sorry, can you show your workings or give an example as I can't for the life of me see how money earning interest at 2.5-2.75% can ever be earning less than the ESA at 1.36%

dcs34

Bank	Rate	Monthly		Details
Bank of Scotland Monthly Saver	2.00%	£       250.00		CAN WITHDRAW MONEY WITH NO CHARGES CANNOT REPLACE WITHDRAWN MONEY
Coventry Regular Saver	2.50%	£       500.00		ANY WITHDRAWALS LOSE 30 DAYS INTEREST
Ecology Regular Saver	1.75%	£       250.00		-
First Direct Regular Saver	2.75%	£       300.00		NO WITHDRAWALS MISSED PAYMENTS CAN BE MADE LATER
Halifax Regular Saver	2.00%	£       250.00		NO WITHDRAWALS
HSBC Regular Saver	5.00%	£       250.00		MUST DEPOSIT £25 MIN LOWER PAYMENTS CAN BE MADE LATER
Lloyds Club Monthly Saver	2.50%	£       400.00		-
Lloyds Monthly Saver	2.00%	£       250.00		-
Principality Xmas 2020 Saver	2.70%	£       125.00		-
Saffron 170th Regular Saver	2.50%	£100-£1000		WITHDRAWALS MADE AT NO CHARGE
Saffron Small Saver	4.00%	£         50.00		WITHDRAWALS MADE AT NO CHARGE
TSB Monthly Saver	2.00%	£       250.00		CAN WITHDRAW MONEY WITH NO CHARGES CANNOT REPLACE WITHDRAWN MONEY
Virgin Money Regular Saver 18	3.00%	£       250.00		CANNOT REPLACE WITHDRAWN MONEY
Virgin Money Regular Saver 19	3.00%	£       250.00		CANNOT REPLACE WITHDRAWN MONEY
Virgin Money Regular E-Saver 13	2.00%	£       250.00		CANNOT REPLACE WITHDRAWN MONEY
YBS Regular Saver 2	2.50%	£       250.00		1 WITHDRAWAL PER YEAR PLUS CLOSURE

Steven.Still

LobsterMemory said:

Steven.Still said:

there comes a point that you have a certain amount of cash saved and being added to that by closing the RS and putting it all in the lower interest % account that beats the combined earning power of the RS. 

Sorry, can you show your workings or give an example as I can't for the life of me see how money earning interest at 2.5-2.75% can ever be earning less than the ESA at 1.36%

That's quite simple actually. We are limited on how much anyone can save in to a Regular Saver. You only earn interest on what's in the account at that time. There is no such limitation with EAS accounts, so in theory, if I could deposit say £10,000 immediately in an EAS earning 1.36%, then the interest you'll earn on that is more than the top pick RS accounts will earn in the year. The only downside is that the EAS rate is variable.

Steven.Still

dcs34 said:

Bank	Rate	Monthly		Details
Bank of Scotland Monthly Saver	2.00%	£       250.00		CAN WITHDRAW MONEY WITH NO CHARGES CANNOT REPLACE WITHDRAWN MONEY
Coventry Regular Saver	2.50%	£       500.00		ANY WITHDRAWALS LOSE 30 DAYS INTEREST
Ecology Regular Saver	1.75%	£       250.00		-
First Direct Regular Saver	2.75%	£       300.00		NO WITHDRAWALS MISSED PAYMENTS CAN BE MADE LATER
Halifax Regular Saver	2.00%	£       250.00		NO WITHDRAWALS
HSBC Regular Saver	5.00%	£       250.00		MUST DEPOSIT £25 MIN LOWER PAYMENTS CAN BE MADE LATER
Lloyds Club Monthly Saver	2.50%	£       400.00		-
Lloyds Monthly Saver	2.00%	£       250.00		-
Principality Xmas 2020 Saver	2.70%	£       125.00		-
Saffron 170th Regular Saver	2.50%	£100-£1000		WITHDRAWALS MADE AT NO CHARGE
Saffron Small Saver	4.00%	£         50.00		WITHDRAWALS MADE AT NO CHARGE
TSB Monthly Saver	2.00%	£       250.00		CAN WITHDRAW MONEY WITH NO CHARGES CANNOT REPLACE WITHDRAWN MONEY
Virgin Money Regular Saver 18	3.00%	£       250.00		CANNOT REPLACE WITHDRAWN MONEY
Virgin Money Regular Saver 19	3.00%	£       250.00		CANNOT REPLACE WITHDRAWN MONEY
Virgin Money Regular E-Saver 13	2.00%	£       250.00		CANNOT REPLACE WITHDRAWN MONEY
YBS Regular Saver 2	2.50%	£       250.00		1 WITHDRAWAL PER YEAR PLUS CLOSURE

Some of those rates our out of date now. HSBC haven't given 5% for a while now.

YorkshireBoy

Steven.Still said:

LobsterMemory said:

Steven.Still said:

there comes a point that you have a certain amount of cash saved and being added to that by closing the RS and putting it all in the lower interest % account that beats the combined earning power of the RS. 

Sorry, can you show your workings or give an example as I can't for the life of me see how money earning interest at 2.5-2.75% can ever be earning less than the ESA at 1.36%

That's quite simple actually. We are limited on how much anyone can save in to a Regular Saver. You only earn interest on what's in the account at that time. There is no such limitation with EAS accounts, so in theory, if I could deposit say £10,000 immediately in an EAS earning 1.36%, then the interest you'll earn on that is more than the top pick RS accounts will earn in the year. The only downside is that the EAS rate is variable.

You're forgetting your money will spend some time in both accounts when dripfeeding, so you'll earn an aggregate interest rate of somewhere half way between the two rates. So nudging 2% on the entire £10K.