Regular Saver or Easy Access Saver

LobsterMemory

Even if not drip-feeding, say you are only putting #750 of your #1150 in Regular Savers, you don't keep the spare #400 in a non-interest current a/c, you put it in the Easy Access.

Huggy_Bear

There is a drip feed calculator on the MSE savings page - right at the bottom here https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/

You can put in how much you have in your instant access and interest rate, then you put how much you drip feed per month and the RS interest rate and it gives the interest you will earn. The nice bit it tells you what you would earn if you just kept the money in the instant access account.

Here is an example of having £5000 in a 1.3% instant access account with £250 going into a 2% RS

After drip-feeding the cash for 12 months...

Total interest earned: £76
£44 from the normal savings & £32 in the regular saver.

If you'd kept the money only in the normal savings account you'd have earned £65 in interest.

So you earn an extra £11

Mrbeethoven

I used to have several of these but now I only have the Lloyds Club one (max £400 per month) and that matures in about 10 days. I have been considering not bothering to renew it again and Huggy Bear's post makes that even more likely as it nicely demonstrates how these are just not worth bothering with any more now that the rates offered are so poor.

Huggy_Bear

Mrbeethoven said:

I used to have several of these but now I only have the Lloyds Club one (max £400 per month) and that matures in about 10 days. I have been considering not bothering to renew it again and Huggy Bear's post makes that even more likely as it nicely demonstrates how these are just not worth bothering with any more now that the rates offered are so poor.

It obviously makes it worthwhile if the RS interest rate is more than 2% or if you are prepared to have multiple RS as all the extras add up. I've opened the Coventry RS 2.5% as that makes sense for me - I've just sold some shares so will deposit the funds in my Marcus and then drip feed £500 - I'll get around £40 extra in interest.

I've got a Virgin RS 2% which I pay £250 monthly. I then use this money in 2021 to spend on household bills (oil, logs, car service etc). When it matures I put the balance back in Marcus. It helps me save for irregular costs.

If you have a NatWest current a/c they have a savings builder which you can earn 1.5% on £5000+ if you increase the balance by £50 each month. I've done the maths for my situation and it doesn't make it worth while and I'm not keen on locking away £5k

Have a look though as it may pay for different circumstances

https://personal.natwest.com/personal/savings/savings-builder.html

george4064

Just use both, so initially park all your money in an instant savings account which will act as your 'feeder' account. Then make the necessary monthly contributions to your various regular savers from the cash held in your feeder account.

Best of both worlds.

afis1904

The Nat West savings builder pays 1.5% if you grow your balance by at least £50 every month. Not sure where you got the 5% from.

Huggy_Bear

afis1904 said:

The Nat West savings builder pays 1.5% if you grow your balance by at least £50 every month. Not sure where you got the 5% from.

typo!

YorkshireBoy

Mrbeethoven said:

I used to have several of these but now I only have the Lloyds Club one (max £400 per month) and that matures in about 10 days. I have been considering not bothering to renew it again and Huggy Bear's post makes that even more likely as it nicely demonstrates how these are just not worth bothering with any more now that the rates offered are so poor.

The Club Lloyds Regular saver has a FIXED interest rate. The feeder account will almost certainly have a VARIABLE rate. One of the most popular, Marcus, will have its underlying rate cut soon I believe. You may regret your decision not to lock in to fixed rates.

Of course the larger your pot the more beneficial regular savers become. Some here will be paying out around £6-10K per month..so all those £11s soon mount up.

grumiofoundation

Steven.Still said:

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

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.

How is 2% of X (X increasing month on month) plus 1.36% of (10000-X) less than 1.36% of 10000?

nottsphil

Steven.Still said:

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 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! 😂

There is no such point.

In any one month you will have £x earning an easy access rate and £y earning a much higher Regular Saver rate (divide the APR by 12 to work it out ). It's bizarre that someone could think it would be beneficial to transfer money earning that higher monthly rate to accounts earning the lower one.