Funding the 7% first direct regular saver? P.S. Changing the standing order date will lose you cash

bristolleedsfan

AmityNeon said:

Not just pennies, due to the potential of the full balance earning interest for almost two months instead of one.

The average interest for 12 approximately equal periods is £136.50. If the account was opened/funded on 30th March 2023, and a manual standing order was then created for the 1st of each subsequent month, interest would equal £154.36, an increase of £17.86.

£300 that would gain nearly extra month interest via that method would be gaining up to slightly less interest for the month in question elsewhere via FD stated method something that does not appear to have been factored into above calculation.

Yorkshire_Pud

AmityNeon said:

Yorkshire_Pud said:

PloughmansLunch said:

Not as far as I know, it’s even stricter than the HSBC regular saver as it doesn’t even allow transfers in from the FD current account.

Yep seems the only sensible way to run the account after reading the t&c and some posts after yours, can’t take the theoretical workarounds seriously. First direct themselves set up the initial transfer and subsequent eleven standing orders on the monthly anniversary of account opening, no scope to change it to the 1st of the month as I was hoping without account closure.

It's not a theoretical workaround; it works in practice, with no loss of interest. Everyone is free to do as they wish of course, but this forum is more than just regurgitating providers' terms and conditions’

What  you may or may not have done is against fd t&c which could result in them closing your account IF it comes to their attention. That may be worth the risk to you but it won’t be to others who are of a more cautious or play by the rules disposition.

It’s not possible to amend the SO that fd themselves set up except by phoning them to alter the amount indicating they have a degree of control not usually exerted on SO which can usually be amended by the customer online including other fd SO?

The SO that fd themselves set up CAN be deleted online and a new SO with chosen new date CAN be set up by the account holder online without fd contact by using the RS sort code and account number?

Just trying to establish the facts and not trying to prolong needless arguments and bad feeling that this thread seems to be delving into. 

AmityNeon

dealyboy said:

How do you get to £154.36? and why does it matter what day of the month your SO is? ... sorry.

Surely interest is earned daily and the duration of the saver is 365 days so each payment will gain 365 days interest minus the number of days since the opening first payment.

(see response further below)

bristolleedsfan said:

AmityNeon said:

Not just pennies, due to the potential of the full balance earning interest for almost two months instead of one.

The average interest for 12 approximately equal periods is £136.50. If the account was opened/funded on 30th March 2023, and a manual standing order was then created for the 1st of each subsequent month, interest would equal £154.36, an increase of £17.86.

£300 that would gain nearly extra month interest via that method would be gaining up to slightly less interest for the month in question elsewhere via FD stated method something that does not appear to have been factored into above calculation.

It's the full balance earning nearly an extra month's interest, not just £300. To look at this from another perspective, you're almost starting with £600 from month 1 (instead of £300), so in effect, you're earning interest on an additional monthly deposit for nearly eleven months (not the final month because you can't make a 13th deposit).

Of course, you must then factor in the opportunity cost of holding this extra £300 in the account for nearly 11 months instead of elsewhere, so subtract whichever lower rate from 7% as necessary.

Yorkshire_Pud said:

The SO that fd themselves set up CAN be deleted online and a new SO with chosen new date CAN be set up by the account holder online without fd contact by using the RS sort code and account number?

Yes.

We all know what the T&Cs state (the theory), but one utility of this forum is the sharing and discovery of what happens in practice. I have shared what I have learned from other forumites in the past, as well as from my own experience, and I always strive to be accurate, but it is not an endorsement or recommendation of what anyone should or should not do with their money.

Yorkshire_Pud

@AmityNeon

Thanks for the explanation. Tempted seeing it’s near month end but new to fd and hoping for the £175 joining inducement so will just wait until early next month!

gt94sss2

pafpcg said:

I've been contributing to HSBC Group regular savers for years - I've learned to accept what's offered and not to try to make changes - I apply to open the accounts two days before what I regard as the optimum date and then pump in the maximum monthly amount until such time as the HSBC/FD interest rate is no longer attractive.

Last time I opened a RS online with HSBC online, it opened the account immediately rather then the delay that used to be there.

dealyboy

Thanks @AmityNeon ...

AmityNeon said:

dealyboy said:

How do you get to £154.36? and why does it matter what day of the month your SO is? ... sorry.

Surely interest is earned daily and the duration of the saver is 365 days so each payment will gain 365 days interest minus the number of days since the opening first payment.

(see response further below)

bristolleedsfan said:

AmityNeon said:

Not just pennies, due to the potential of the full balance earning interest for almost two months instead of one.

The average interest for 12 approximately equal periods is £136.50. If the account was opened/funded on 30th March 2023, and a manual standing order was then created for the 1st of each subsequent month, interest would equal £154.36, an increase of £17.86.

£300 that would gain nearly extra month interest via that method would be gaining up to slightly less interest for the month in question elsewhere via FD stated method something that does not appear to have been factored into above calculation.

It's the full balance earning nearly an extra month's interest, not just £300. To look at this from another perspective, you're almost starting with £600 from month 1 (instead of £300), so in effect, you're earning interest on an additional monthly deposit for nearly eleven months (not the final month because you can't make a 13th deposit).

Of course, you must then factor in the opportunity cost of holding this extra £300 in the account for nearly 11 months instead of elsewhere, so subtract whichever lower rate from 7% as necessary.

Yorkshire_Pud said:

The SO that fd themselves set up CAN be deleted online and a new SO with chosen new date CAN be set up by the account holder online without fd contact by using the RS sort code and account number?

Yes.

We all know what the T&Cs state (the theory), but one utility of this forum is the sharing and discovery of what happens in practice. I have shared what I have learned from other forumites in the past, as well as from my own experience, and I always strive to be accurate, but it is not an endorsement or recommendation of what anyone should or should not do with their money.

... so bringing the SO day of the month schedule forward by 30 days for 11 payments in your example of:
- 31/03 open and first SO payment
- cancel SO
- 01/04 create new SO and payment
- thereafter SO payment on 1st of a month 10 times
- RS matures (i) on 31/03 (anniversary) next year or (ii) 01/03 (30 days after 12th SO of 01/02)
- if (i) gain of 30 x 11 = 330 days interest on £300
- if (ii) loss of 30 days interest on £300

What's to stop you cancelling after the SO of 01/04 and creating another new one, would that bring forward the schedule again?

Have I missed it?

kaMelo

dealyboy said:

Thanks @AmityNeon ...

AmityNeon said:

dealyboy said:

How do you get to £154.36? and why does it matter what day of the month your SO is? ... sorry.

Surely interest is earned daily and the duration of the saver is 365 days so each payment will gain 365 days interest minus the number of days since the opening first payment.

(see response further below)

bristolleedsfan said:

AmityNeon said:

Not just pennies, due to the potential of the full balance earning interest for almost two months instead of one.

The average interest for 12 approximately equal periods is £136.50. If the account was opened/funded on 30th March 2023, and a manual standing order was then created for the 1st of each subsequent month, interest would equal £154.36, an increase of £17.86.

£300 that would gain nearly extra month interest via that method would be gaining up to slightly less interest for the month in question elsewhere via FD stated method something that does not appear to have been factored into above calculation.

It's the full balance earning nearly an extra month's interest, not just £300. To look at this from another perspective, you're almost starting with £600 from month 1 (instead of £300), so in effect, you're earning interest on an additional monthly deposit for nearly eleven months (not the final month because you can't make a 13th deposit).

Of course, you must then factor in the opportunity cost of holding this extra £300 in the account for nearly 11 months instead of elsewhere, so subtract whichever lower rate from 7% as necessary.

Yorkshire_Pud said:

The SO that fd themselves set up CAN be deleted online and a new SO with chosen new date CAN be set up by the account holder online without fd contact by using the RS sort code and account number?

Yes.

We all know what the T&Cs state (the theory), but one utility of this forum is the sharing and discovery of what happens in practice. I have shared what I have learned from other forumites in the past, as well as from my own experience, and I always strive to be accurate, but it is not an endorsement or recommendation of what anyone should or should not do with their money.

... so bringing the SO day of the month schedule forward by 30 days for 11 payments in your example of:
- 31/03 open and first SO payment
- cancel SO
- 01/04 create new SO and payment
- thereafter SO payment on 1st of a month 10 times
- RS matures (i) on 31/03 (anniversary) next year or (ii) 01/03 (30 days after 12th SO of 01/02)
- if (i) gain of 30 x 11 = 330 days interest on £300
- if (ii) loss of 30 days interest on £300

What's to stop you cancelling after the SO of 01/04 and creating another new one, would that bring forward the schedule again?

Have I missed it?

You can't as the earliest you can make the next payment would be 1st of May.

Maturity date is twelve months determined from account opening date, when you pay money in has no relevance to this.

thebikemechanic

Just adding that the comments that the payment date is inflexible aren't reflective of my experience with the Regular Saver. Opened mine mid December, with £25 to get it opened, and then called them a few days later to request the standing order be changed to £300 and taken on the 1st of the month for the next 11 payments. They set that up without issue and didn't mention it being a problem in any way. 

Yorkshire_Pud

pafpcg said:

bristolleedsfan said:

wmb194 said:

Yorkshire_Pud said:

No and you can vary the monthly deposit but only by changing the standing order.

"The date of your standing order payment needs to remain the same once set up"

I seem to recall a discussion about this topic a year or two ago.  Someone claimed to have managed to change the date of the standing order to early in the month but discovered that it resulted in giving HSBC or First Direct an interest-free loan until the original standing order's date!  Of course, it's all just hearsay I'm afraid. 

I've been contributing to HSBC Group regular savers for years - I've learned to accept what's offered and not to try to make changes - I apply to open the accounts two days before what I regard as the optimum date and then pump in the maximum monthly amount until such time as the HSBC/FD interest rate is no longer attractive.

2025 Update!

Having done the open RS at month end, delete standing order that 1st direct set up for you and then myself setting up a standing order manually for the first of the month workaround in the hope of garnering the £154.36 interest instead of the usual £136.50 I have to say I agree with the interest free loan to first direct ‘hearsay’ theory. I got £140.36 at maturity so less than £4 extra for my efforts and way short of the additional £17.86 one could theoretically get. In fact even that £3.86 may be from the account maturing over a Easter weekend, so basically I got nothing and one could also say that had the £300 I ‘lent’ by paying four weeks early for the next 11 payments been invested elsewhere I could have got say 4% interest on it for a year so about £12 lost 😞 

Can’t really complain though. Thems the rules and it seems FD have indeed turned the supposed workaround back on me!

That was two years ago and I compared to the last year where I didn’t try and game the system and got £136.

It was only comparing the matured amounts for the last two years that I realised the workaround doesn’t/didn’t work. 

Has anyone actually got the mythical £154 bumped up interest?

intalex

Yorkshire_Pud said:

2025 Update!

Having done the open RS at month end, delete standing order that 1st direct set up for you and then myself setting up a standing order manually for the first of the month workaround in the hope of garnering the £154.36 interest instead of the usual £136.50 I have to say I agree with the interest free loan to first direct ‘hearsay’ theory. I got £140.36 at maturity so less than £4 extra for my efforts and way short of the additional £17.86 one could theoretically get. In fact even that £3.86 may be from the account maturing over a Easter weekend, so basically I got nothing and one could also say that had the £300 I ‘lent’ by paying four weeks early for the next 11 payments been invested elsewhere I could have got say 4% interest on it for a year so about £12 lost 😞 

Can’t really complain though. Thems the rules and it seems FD have indeed turned the supposed workaround back on me!

That was two years ago and I compared to the last year where I didn’t try and game the system and got £136.

It was only comparing the matured amounts for the last two years that I realised the workaround doesn’t/didn’t work. 

Has anyone actually got the mythical £154 bumped up interest?

Thank you for your sacrifice in trialling this, I also learnt from these forums (and believed) that there would be no gains, but the question still recently cropped up in my mind for an upcoming maturity / new cycle...

On a related note, keen to learn how fast matured accounts are being closed now (with/without follow-up) and new ones opened (once applied for on the app)...