Should I cancel an existing regular saver and move the money to a higher interest account?

johnc

Hi Everyone, 

I don't usually post on here so forgive me if I have asked this in the wrong section etc. I have a regular saver that is 1% with Lloyds that I opened in Dec (£400 per month) though realising now there is 1.5% easy access from Chase that I am planning to move other money to would it make sense to cancel this regular saver and lose the interest on that from Dec to now to instead move that money to the 1.5% account? Hope this makes sense! 

Regards, 
John.

masonic

There are no penalties for withdrawing/closing early, therefore no reason not to do as you suggest. You would not lose any interest already accrued.

MX5huggy

The original £400 will be worth £404 in December if you leave it. If you move it will also be worth £404. The £400 you last put in will be worth about £403 in December but would be worth 404 with Chase. Don’t put any more money in the regular saver but there’s little difference in withdrawing or sticking. 

masonic

MX5huggy said:

The original £400 will be worth £404 in December if you leave it. If you move it will also be worth £404. The £400 you last put in will be worth about £403 in December but would be worth 404 with Chase. Don’t put any more money in the regular saver but there’s little difference in withdrawing or sticking. 

I agree that £400 at 1% for a year will earn £4 interest, but in the case it is taken out early and paid into Chase, it will be spending about 4 months at 1% followed by 8 months at 1.5%, giving a blended interest rate of about 1.33% and would earn about £5.33 interest in total. A contribution made today will essentially earn interest at 1.5% for 8 months at Chase, earning £4, vs £2.67 at Lloyds.

Each contribution so far made could therefore earn an extra ~£1.33 by virtue of being moved to an account paying an extra 0.5% interest over the remaining 8 months lifetime of the regular saver, the balance would therefore generate ~£5.30 in extra interest. Whether that is worth closing the regular saver for I'll leave up to the OP.

MX5huggy

masonic said:

MX5huggy said:

The original £400 will be worth £404 in December if you leave it. If you move it will also be worth £404. The £400 you last put in will be worth about £403 in December but would be worth 404 with Chase. Don’t put any more money in the regular saver but there’s little difference in withdrawing or sticking. 

I agree that £400 at 1% for a year will earn £4 interest, but in the case it is taken out early and paid into Chase, it will be spending about 4 months at 1% followed by 8 months at 1.5%, giving a blended interest rate of about 1.33% and would earn about £5.33 interest in total.

I was presuming that taking the money out of the regular saver forfeited interest already earned. 

where_are_we

We have closed our Club Lloyds Regular Savers and moved the proceeds over to Chase. You will not be penalised with loss of interest. Because the 1% interest rate is fixed, there can be no increase in the interest rate over the one year term. Remember to cancel your monthly standing order to fund the CLRS. You will not be able to open a new CLRS until the anniversary of opening your CLRS. You will benefit from extra interest and it is one less SO to fund.

johnc

MX5huggy said:

masonic said:

MX5huggy said:

The original £400 will be worth £404 in December if you leave it. If you move it will also be worth £404. The £400 you last put in will be worth about £403 in December but would be worth 404 with Chase. Don’t put any more money in the regular saver but there’s little difference in withdrawing or sticking. 

I agree that £400 at 1% for a year will earn £4 interest, but in the case it is taken out early and paid into Chase, it will be spending about 4 months at 1% followed by 8 months at 1.5%, giving a blended interest rate of about 1.33% and would earn about £5.33 interest in total.

I was presuming that taking the money out of the regular saver forfeited interest already earned. 

Thanks for the responses - this is what I had assumed aswell? 

Bigwheels1111

Go with Chase.
I was lucky enough to get a Skipton regular saver last year at 3.5%, £250 a month.
Tomorrow I’m taking out 2 First Direct regular savers, £300 a month at 3.5%.
I will transfer the £300 on the 27th of the month from chase getting the maximum internet possible.