Fabulous Investment with negative fees. Get Paid to invest. No Catch.

pafpcg

fred246 said:

pafpcg said:

fred246 said:

You could open a reward account. Set up a transfer of £1500 a month into the account. Set up a regular £500 investment and a regular £1000 out again. Would all be automatic.

How have you automated the £500 "purchase" every month from your Halifax Reward debit card?

On the Halifax Share Dealing website you set up an automatic investment. It's £12.50 normally but a monthly automatic investment is £2. So you set up a standing order to pay £1500 in to the reward account at the start of each month. You then make an automatic monthly investment of £500 and send £1000 back to your normal current account. The originality comes from the OCF of 0.13% on the HSBC FTSE all world index. Here is a good global index tracker as recommended by monevator and many investing experts for 0% total fees. If you engage an IFA they will often charge 2% year after year although they will set up a portfolio to make investing seem more complicated.

Thanks for your clarification.

Are you saying that HSDL's S&S ISA has a facility to automatically debit a sum of money from your debit card every month?  A sort of recurring payments facility?  Not having a HSDL S&S ISA, I haven't been able to check this, but the only funding facility I could find on my HSDL Share Dealing and IWeb S&S ISA accounts was to take funds from my debit card as one-off payments which is what I have to do manually every month.  Have you set-up such a recurring payments arrangement on your debit card and has your Halifax Reward account had the £5 bonus credited?

For the rest of us, without a facility to fund the ISA account with funds from a debit card automatically, beware!  Paying the £500 to our S&S ISA every month by standing order will NOT qualify for the £5 Halifax Reward.  The £5 bonus will only be paid if we have met all three criteria, including making £500 of "purchases" on the account's debit card.

crumpet_man

fred246 said:

Well is there a cheaper way of investing in a global tracker fund? Most people would look to Vanguard but their OCF is .23% and then 0.15% platform fee. Total 0.38%. An IFA would charge about 2% for a hotch potch of funds. This is less than £0. They are giving you money.

What are the total fees for doing it your way (ignore the £5 Halifax Reward as you can earn this other ways) compared to same investment on a different platform?

NottinghamKnight

crumpet_man said:

fred246 said:

Well is there a cheaper way of investing in a global tracker fund? Most people would look to Vanguard but their OCF is .23% and then 0.15% platform fee. Total 0.38%. An IFA would charge about 2% for a hotch potch of funds. This is less than £0. They are giving you money.

What are the total fees for doing it your way (ignore the £5 Halifax Reward as you can earn this other ways) compared to same investment on a different platform?

It's £2 as a regular payment. So 0.4% as a one off fee assuming a £500 trade. You are right in so far as it is better not to conflate the halifax reward offer with an investment, that to me is a drawback as you could pay by debit card to get the reward elsewhere and separately contribute to a fund with low costs.

fred246

HSDL allows you to make regular investments. You go onto 'dealing' and regular investing. You then set up a payment which comes out by debit card. You then choose an investment for it to go into a few days later. If it is over £500 you then get the £5 reward. All my spending goes on credit card because I maintain a large quantity of 0% credit card debt. HSDL charge for transactions instead of a percentage so it depends how much you have invested. HSDL works out better for large amounts. Regular investments would be £24 per year. With Reward payments £-36.

NottinghamKnight

One difficulty in suggesting this is that someone attracted to a simple bank account reward may well be a low (no?) knowledge investor. suggesting someone like that invests in a 100% equity fund, with associated volatility, is a bit crazy; it may well end up with that person panicking and baling out after a market crash. This fund could have a 40% fall in extreme events so assuming there is £6k in the fund after a year, probably a little more with some growth, it could easily suffer a £2k plus fall, withdrawing that will crystallise the loss, £60 cashback then looks like scant compensation. 

quirkydeptless

fred246 said:

HSDL allows you to make regular investments. You go onto 'dealing' and regular investing. You then set up a payment which comes out by debit card.

Nice, I like being able to automate things. Currently making my £500 Halifax spend requirement by a manual investment with HL.

fred246

NottinghamKnight said:

One difficulty in suggesting this is that someone attracted to a simple bank account reward may well be a low (no?) knowledge investor. suggesting someone like that invests in a 100% equity fund, with associated volatility, is a bit crazy; it may well end up with that person panicking and baling out after a market crash. This fund could have a 40% fall in extreme events so assuming there is £6k in the fund after a year, probably a little more with some growth, it could easily suffer a £2k plus fall, withdrawing that will crystallise the loss, £60 cashback then looks like scant compensation. 

I know. I totally agree. You have to read about investing before doing it. I well remember popping into the library before a holiday and borrowing a book on investing. Can't remember exactl title. When I came home I would be happy to invest. But someone with no knowledge? Scary.

fred246

Before that holiday I thought of investments as 'gambling'. When I came home I had changed my opinion. Now I think of them as 'sensible gambling'.

quirkydeptless

fred246 said:

Before that holiday I thought of investments as 'gambling'. When I came home I had changed my opinion. Now I think of them as 'sensible gambling'.

I think of it as gambling where you have house odds

drphila

Eco_Miser said:

 another £5.

where does the extra fiver come from?