natwest digital saver worth it?

OldScientist

Alexland said:

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.

Long term real total returns can be found in the Credit Suisse Global Investment Returns Yearbook (the summary edition is free). You are right, they are not 7%, but the UK had real returns of 5.4% (1900-2021) and World had 5.3% (1900-2020, although that is in USD and with US inflation - increase it a bit for the century long decline in the GBP-USD exchange rate and decrease it a bit for the larger inflation seen in the UK).

Of course, these are mean values and real returns even in relatively long periods (say 40 years) can vary considerably. For example, for the UK for historical 40 year rolling periods, the annualised real total return of stocks has varied from 1.4% (1st percentile), to 4.8% (median). For comparison, cash (3 month bills) has varied from -2.2% to 0.8% (these are my own calculations using the database at https://www.macrohistory.net/ for UK data from 1872-2015).

While these tell us nothing about the future, they do at least tell something about what returns were.

OldScientist

ps I should also add (marginally more relevant to the thread), that over rolling ten year periods the worst case real returns for stocks were -6.9% and for cash -5.2%.

If you need cash for the short term, then the NatWest Digital saver is a fairly attractive, if limited, place to park it.

RG2015

I have £3,544 in RBS and NatWest Digital Regular Savers earning 6.17%.

In 21 months I could have £10,000 earning £50 per month. There is no other easy access account paying this amount.

The problem is that in order to get the best return you shouldn’t ever withdraw any money. Hence it is more like an emergency fund than an easy access or regular saver.

NatWest RBS must know that most subscribers will not touch their funds, so it guarantees them both growth and capital on the majority of their balances.

This is a very clever marketing tactic.

dealyboy

RG2015 said:

I have £3,544 in RBS and NatWest Digital Regular Savers earning 6.17%.

In 21 months I could have £10,000 earning £50 per month. There is no other easy access account paying this amount.

The problem is that in order to get the best return you shouldn’t ever withdraw any money. Hence it is more like an emergency fund than an easy access or regular saver.

NatWest RBS must know that most subscribers will not touch their funds, so it guarantees them both growth and capital on the majority of their balances.

This is a very clever marketing tactic.

... I suspect the interest rate will be lower by then, but also lower inflation.

RG2015

dealyboy said:

RG2015 said:

I have £3,544 in RBS and NatWest Digital Regular Savers earning 6.17%.

In 21 months I could have £10,000 earning £50 per month. There is no other easy access account paying this amount.

The problem is that in order to get the best return you shouldn’t ever withdraw any money. Hence it is more like an emergency fund than an easy access or regular saver.

NatWest RBS must know that most subscribers will not touch their funds, so it guarantees them both growth and capital on the majority of their balances.

This is a very clever marketing tactic.

... I suspect the interest rate will be lower by then, but also lower inflation.

Yes, this is likely but even now there is nothing better.

£3,544 currently earns £17.72 and each month this increases by £1.50

dealyboy

RG2015 said:

dealyboy said:

RG2015 said:

I have £3,544 in RBS and NatWest Digital Regular Savers earning 6.17%.

In 21 months I could have £10,000 earning £50 per month. There is no other easy access account paying this amount.

The problem is that in order to get the best return you shouldn’t ever withdraw any money. Hence it is more like an emergency fund than an easy access or regular saver.

NatWest RBS must know that most subscribers will not touch their funds, so it guarantees them both growth and capital on the majority of their balances.

This is a very clever marketing tactic.

... I suspect the interest rate will be lower by then, but also lower inflation.

Yes, this is likely but even now there is nothing better.

£3,544 currently earns £17.72 and each month this increases by £1.50

... indeed.

I'm on the same path as you in the distance ... just reaching the first straight ... £150 + £150.

Stargunner

RG2015 said:

I have £3,544 in RBS and NatWest Digital Regular Savers earning 6.17%.

In 21 months I could have £10,000 earning £50 per month. There is no other easy access account paying this amount.

The problem is that in order to get the best return you shouldn’t ever withdraw any money. Hence it is more like an emergency fund than an easy access or regular saver.

NatWest RBS must know that most subscribers will not touch their funds, so it guarantees them both growth and capital on the majority of their balances.

This is a very clever marketing tactic.

You could have the £10k in there a lot sooner than that if you make use of the double round ups.

PloughmansLunch

Stargunner said:

RG2015 said:

I have £3,544 in RBS and NatWest Digital Regular Savers earning 6.17%.

In 21 months I could have £10,000 earning £50 per month. There is no other easy access account paying this amount.

The problem is that in order to get the best return you shouldn’t ever withdraw any money. Hence it is more like an emergency fund than an easy access or regular saver.

NatWest RBS must know that most subscribers will not touch their funds, so it guarantees them both growth and capital on the majority of their balances.

This is a very clever marketing tactic.

You could have the £10k in there a lot sooner than that if you make use of the double round ups.

With two accounts to deal with (200 x £0.01) and roughly 20 seconds per transaction with a fair wifi wind behind you, that would mean spending about an hour a day hunched over like a goblin firing off PayPal payments.

dealyboy

Hi @Stargunner ...

Stargunner said:

RG2015 said:

I have £3,544 in RBS and NatWest Digital Regular Savers earning 6.17%.

In 21 months I could have £10,000 earning £50 per month. There is no other easy access account paying this amount.

The problem is that in order to get the best return you shouldn’t ever withdraw any money. Hence it is more like an emergency fund than an easy access or regular saver.

NatWest RBS must know that most subscribers will not touch their funds, so it guarantees them both growth and capital on the majority of their balances.

This is a very clever marketing tactic.

You could have the £10k in there a lot sooner than that if you make use of the double round ups.

... I don't know about @RG2015, but if you mean by micro transaction methods discussed in this forum, for me that feels like 'gaming the system' which is why I will stick with natural transactions whilst having double-roundups enabled on both accounts of course.

RG2015

Stargunner said:

RG2015 said:

I have £3,544 in RBS and NatWest Digital Regular Savers earning 6.17%.

In 21 months I could have £10,000 earning £50 per month. There is no other easy access account paying this amount.

The problem is that in order to get the best return you shouldn’t ever withdraw any money. Hence it is more like an emergency fund than an easy access or regular saver.

NatWest RBS must know that most subscribers will not touch their funds, so it guarantees them both growth and capital on the majority of their balances.

This is a very clever marketing tactic.

You could have the £10k in there a lot sooner than that if you make use of the double round ups.

It would take 3,260 debit card transactions of 1 penny to get me to £10,000.