natwest digital saver worth it?

Alexland

dealyboy said:

Hi @allegro120 ...
... No offence meant, but surely that's investment level savings.

Maybe but they might intend to spend/gift the money in a timeframe that's not long enough to ride out investment volatility, this cash might be part of a much larger portfolio, or with such high RS rates they don't consider it's enough risk premium given the long term returns of global stock markets are only around 7% before fees anyway.

dealyboy

Hi @Alexland ...

Alexland said:

dealyboy said:

Hi @allegro120 ...
... No offence meant, but surely that's investment level savings.

Maybe but they might intend to spend/gift the money in a timeframe that's not long enough to ride out investment volatility, this cash might be part of a much larger portfolio, or with such high RS rates they don't consider it's enough risk premium given the long term returns of global stock markets are only around 7% before fees anyway.

Indeed ... seriously just trying to inform and provoke thought 

allegro120

Stargunner said:

allegro120 said:

Alexland said:

kaMelo said:

Where else can you get 6% on money that is available with easy access?

Club Lloyds RS @ 6.25% on up to £400 pm?

Then maybe add a further £250 pm into their standard RS @ 5.25%

But yes I agree £150 pm into Natwest Digital Saver may be part of the mix of getting the money working. It's nice that unlike most high rate RS accounts this Natwest product doesn't mature after 12 months so there's a chance of building up and running a healthy balance long term if they keep the interest rate attractive.

It adds up. I'm currently paying £3,800 a month into regular savers, all in the range of 4%-7%.  This will increase  when I open new Saffron RS.

I imagine that must take you over the psa limit for the amount of interest that you will be earning. Have you already contributed your £20k allowance into an ISA this tax year?

Yes, my ISA allowance is in VM @4.25%. My personal income is very low so I believe my PSA is £6k.  

aaj123

Alexland said:

dealyboy said:

Hi @allegro120 ...
... No offence meant, but surely that's investment level savings.

Maybe but they might intend to spend/gift the money in a timeframe that's not long enough to ride out investment volatility, this cash might be part of a much larger portfolio, or with such high RS rates they don't consider it's enough risk premium given the long term returns of global stock markets are only around 7% before fees anyway.

Exactly how I see this year too and is also why crypto is among the only risk asset I am seeing value in. That's what seems worthwhile for the potential upside, relative to the risk free savings. 

allegro120

Alexland said:

dealyboy said:

Hi @allegro120 ...
... No offence meant, but surely that's investment level savings.

Maybe but they might intend to spend/gift the money in a timeframe that's not long enough to ride out investment volatility, this cash might be part of a much larger portfolio, or with such high RS rates they don't consider it's enough risk premium given the long term returns of global stock markets are only around 7% before fees anyway.

Not very large.  When RSs mature the money goes back to IAs or short term fixed which keep drip feeding RSs.  You're right, I don't consider investing in global stock markets worth the risk for projected returns slightly above FSCS protected accounts. 

Rollinghome

Alexland said:

dealyboy said:

Hi @allegro120 ...
... No offence meant, but surely that's investment level savings.

Maybe but they might intend to spend/gift the money in a timeframe that's not long enough to ride out investment volatility, this cash might be part of a much larger portfolio, or with such high RS rates they don't consider it's enough risk premium given the long term returns of global stock markets are only around 7% before fees anyway.

Need to be careful with figures for long term market returns. It depends on which stock markets are being included, on the time period, on whether the figure is the index return or the total return including divis, and on whether the figure is before or after inflation. Google and you'll see all sorts of figures given.

The figure of around 7%, often seen, usually means after inflation.  To get 7% after inflation at the moment for savings, you'd need a rate of around 17%, and you'll be lucky to get a third of that just now. In real terms cash returns are currently dire and you could have to pay tax on them if you've savings of more than £30,000.

Not to say that investments couldn't be still worse. In the long term equities are always expected to outperform cash, but might not over some periods.  Otherwise no-one would accept the risk, hence the "risk premium".   No risk, no premium so not suited to everyone. Horses for courses as always.

Alexland

Rollinghome said:
The figure of around 7%, often seen, usually means after inflation.  

Unsure I have seen any credible research suggesting 7% after inflation was a realistic long term expectation from global equities. I'm generally working on a long term total return expectation of 7% nominal return from equities, 4% of inflation, so 3% real return minus average investor fees of around 0.5% (obviously many on MSE pay less) giving around 2.5% increase in spending power.
The enhanced return on equities comes from the double bubble of the value of the companies going up with inflation plus the reinvested earnings which themselves tend to rise with inflation.
Still it's rarely linear or synchronised and the return will very much depend on where valuations are at the specific start and end years of the investment period. You might get lucky and start when valuations are low and cash out at the top of a bubble.
My guess is global markets priced much of the recent inflation in before it started which is why it currently feels like the return is not keeping up. Can't eat the same cake twice sadly.

RG2015

flaneurs_lobster said:

Barclays Rainy Day? 5% on up to £5K for a year (with a bit of faffing).

It is 5% per annum on up to £5,000 but it is not limited to 1 year though.

The faffing is as follows.

• Open a Barclays current account
• Join Barclays Blue Rewards
• Pay in £800 per month
• Pay out two direct debits per month
• A £5 monthly fee is deducted but there is a £5 bonus if the £800 and 2 DD conditions are met.

allegro120

RG2015 said:

flaneurs_lobster said:

Barclays Rainy Day? 5% on up to £5K for a year (with a bit of faffing).

It is 5% per annum on up to £5,000 but it is not limited to 1 year though.

The faffing is as follows.

• Open a Barclays current account
• Join Barclays Blue Rewards
• Pay in £800 per month
• Pay out two direct debits per month
• A £5 monthly fee is deducted but there is a £5 bonus if the £800 and 2 DD conditions are met.

There are two more - transferring rewards back to current account and withdrawing the interest on the 1st of the month.  Worth doing it though if one wants to take a full advantage of available offers from banks.

Frogletina

allegro120 said:

RG2015 said:

flaneurs_lobster said:

Barclays Rainy Day? 5% on up to £5K for a year (with a bit of faffing).

It is 5% per annum on up to £5,000 but it is not limited to 1 year though.

The faffing is as follows.

• Open a Barclays current account
• Join Barclays Blue Rewards
• Pay in £800 per month
• Pay out two direct debits per month
• A £5 monthly fee is deducted but there is a £5 bonus if the £800 and 2 DD conditions are met.

There are two more - transferring rewards back to current account and withdrawing the interest on the 1st of the month.  Worth doing it though if one wants to take a full advantage of available offers from banks.

My interest funds the two direct debits, but I also then transfer most of the £800 back to my main bank account.

However, it's just now routine for me to do this every month, the same way I feed my regular savers.