standing orders and bank holidays

magritte

Hi, I have a standing order due to leave my Barclays account on the 25th of each month, to a Halifax regular saver account. It needs to reach the account by the 25th. Will it go out on the 25h of May (bank holiday) or the first business day after? Thanks. 

surreysaver

Next business day (Tuesday 26th).  Although you should be okay, they state the 25th of each month to err on the side of caution, to protect against customers such as you who leave standing orders to the last possible date, with February being the worst case scenario if 25th fell on a Saturday, the SO would go out on the Monday 27th giving a day's leeway.
Is there a reason you leave it until 25th?  You'd be better off having it go out on the 1st of each month.

magritte

Thanks, why is it better on the 1st of each month? 

surreysaver

Because the money's in there for longer earning interest, assuming your first deposit was towards the end of the first month (for example, if your first deposit was on 25th March, and your standing order was set up for the 1st of each month, your second deposit would have been 1st April, so that's £500 earning interest for the first month from almost when the account's opened, rather than just the first £250, and each subsequent £250 will be in there for 25 days longer, and for each £250 in there 25 days earlier will earn you an extra 34p per month per £250)

magritte

I opened the account on 4 May but I didn't deposit anything, I set up SOs for 12 months all going out on the 25th of each month on my payday.
I guess that was a mistake thanks. 

surreysaver

magritte said:

I opened the account on 4 May but I didn't deposit anything, I set up SOs for 12 months all going out on the 25th of each month on my payday.
I guess that was a mistake thanks. 

Not a mistake as such, just doesn't maximise the interest!  But you could consider your option is the safer one - depending upon your own financial circumstances, that £250 you're not putting in the Regular Saver until the end of the month is effectively available to you if you need it, whereas if you put it into the Regular Saver at the beginning of the month, if you were to access it, you wouldn't be able to put it back, and I believe there is a penalty with the Regular Saver if you do (I think you might have to close the account to withdraw money from it?).  
That's why I don't tend to top up a cash ISA until towards the end of the tax year - if I wanted to withdraw the money, I wouldn't be able to put it back in.

colsten

Your Halifax RS will mature 12 months from the date you opened it. By delaying your first deposit, you lost some 3 weeks at the start, and you would only get a week's interest on the last payment you make.

But all is not lost. I suggest you

1. delete your existing SO
2. make one manual Faster Payment into the RS straight away (today)
3. set up a new SO, for 11 payments, starting on 01 June 

magritte

Thanks both, I transferred £250 yesterday to the RS account and changed the SO for 1 June, for 11 payments. I've probably made that mistake in the past with my child's RS, but that's water under the bridge now :-) 

Frogletina

surreysaver said:

magritte said:

I opened the account on 4 May but I didn't deposit anything, I set up SOs for 12 months all going out on the 25th of each month on my payday.
I guess that was a mistake thanks. 

That's why I don't tend to top up a cash ISA until towards the end of the tax year - if I wanted to withdraw the money, I wouldn't be able to put it back in.

You could if you used a flexible ISA. I used to withdraw enough from my flexible ISA to fund all of my regular savers and as each regular saver matured, I'd put that back into my flexible ISA. 

I won't do that this year though as my ISA earns less than my Marcus account. I've put the bulk of my ISA money into fixed rate ISAs.