We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Regular Savers with Lloyds and Halifax - worth upgrading interest?

I opened the Halifax and 2 Lloyds RS accounts at the end of October 2022 and funded them with the max amounts, followed by the max amount at the beginning of every month until the start of this month.  So I'm pretty much at the half way point.

I'm drip-feeding these accounts with easy access funds which is currently at around 3.25%.  My logic is that it's best to have that say £250 in the highest interest paying account.

However, I'm not clear on whether I should renew my existing RS accounts to the higher rate ones, because some say the £1500 accumulated (using Halifax as example) to date would only earn interest in the EA rather than current 4.50%?  
«13

Comments

  • Band7
    Band7 Posts: 2,285 Forumite
    1,000 Posts Name Dropper
    edited 26 March 2023 at 3:30PM
    There's a long thread about the halifax upgrade, with a spreadsheet to work out whether it is worth your while. It almost certainly isn't for you. Note that 'upgrading' involves closing your existing account and starting from scratch again
  • howryoo
    howryoo Posts: 222 Forumite
    Third Anniversary 100 Posts Name Dropper
    Thanks - came across that yesterday I think, but it flew over my head.

    Maybe I'm not grasping something - might revisit it.

    Just to put things into context, I also have other easy access funds and not just limited to the amounts already in the RS accounts (if this make any difference).

    My thought is assuming the easy access rate remains at 3.25% and that the current increased RS rates are at its peak, you'll have gained another 6 months from Oct / Nov 2023?

    Maybe I'm just not thinking straight and the penny hasn't quite dropped?


  • refluxer
    refluxer Posts: 3,253 Forumite
    Fifth Anniversary 1,000 Posts Photogenic Name Dropper
    edited 26 March 2023 at 4:16PM
    The main issue for you at nearly the halfway point is that, because you have to start again, the bulk of the money you've pulled out of those Regular Savers is back to earning EA rates (eg, 3.25%) for a while rather than the 4.5% interest it's currently earning while sat in those existing Regular Savers and it'll take you another 5 months to pay all that back in again.
  • howryoo
    howryoo Posts: 222 Forumite
    Third Anniversary 100 Posts Name Dropper
    Yes, but would you not benefit from Oct / Nov 2023 assuming EA rates remain the same?

    Also, I can't seem to track down that thread with those spreadsheet examples (sure it was red / orange highlighted cells?).


  • Eco_Miser
    Eco_Miser Posts: 4,932 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    howryoo said:
    Yes, but would you not benefit from Oct / Nov 2023 assuming EA rates remain the same?

    Also, I can't seem to track down that thread with those spreadsheet examples (sure it was red / orange highlighted cells?).


    Probably not, because they (the RSs) would have matured and been renewed at the prevailing rate at that point, if you just continued with them now.

    Eco Miser
    Saving money for well over half a century
  • refluxer
    refluxer Posts: 3,253 Forumite
    Fifth Anniversary 1,000 Posts Photogenic Name Dropper
    edited 26 March 2023 at 5:46PM
    howryoo said:
    Yes, but would you not benefit from Oct / Nov 2023 assuming EA rates remain the same?
    Yes, from that point onwards you will have the same amount of money sat in those Regular Savers as you do now but at the higher rate however, in the meantime, a big (although decreasing) proportion of the money you've taken out would be earning 3.25% for quite a while rather than the 4.50% it would have earned in the next 6 months if you'd left things as they were.

    It's a tricky thing to get your head round for sure, but I suspect it isn't as much of a no-brainer as it might appear. The fact that you're midway through a 12 month term and the drop from 4.5% to 3.25% is bigger than the increase from 4.5% to 5.5% will be an important factor in that calculation, I would imagine.

    Where the decision can be a no-brainer is when the RS is earning less than the current best EA rates ! For example, I had a Principality RS that I opened last year that was only earning 2.80% so I closed it because the money will earn more in an EA account. Fortunately, the Principality allow you to have one of each issue so you can simply open another at a higher rate. 
  • allegro120
    allegro120 Posts: 2,131 Forumite
    1,000 Posts Second Anniversary Name Dropper
    howryoo said:
    I opened the Halifax and 2 Lloyds RS accounts at the end of October 2022 and funded them with the max amounts, followed by the max amount at the beginning of every month until the start of this month.  So I'm pretty much at the half way point.

    I'm drip-feeding these accounts with easy access funds which is currently at around 3.25%.  My logic is that it's best to have that say £250 in the highest interest paying account.

    However, I'm not clear on whether I should renew my existing RS accounts to the higher rate ones, because some say the £1500 accumulated (using Halifax as example) to date would only earn interest in the EA rather than current 4.50%?  
    I renewed mine when I had £1125 accumulated to date. £250 went to my new Halifax RS and the rest to 90 days notice that is paying 4% (4.25% from next week).  I will be drip feeding new RS from instant access accounts as normal... I don't know if I've made the right decision to renew, I guess the time will show.  Logic behind it was: 1. The rates of IA accounts keep going up (for example, on 1st April I will be feeding my RS from higher paying IA than I did last month).  2. I secured 5.5% for another 12 months.
  • where_are_we
    where_are_we Posts: 1,245 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    It`s "crunch time" (optimum time to change is at the end of the month because you can get in 2 x £250 monthly deposits into the new RS for 1/4/23) whether to "stick" with my Halifax RS @4.5% or renew to a new RS@5.5%. I have decided to renew because (1) 5.5% is fixed and maybe fixed rates are near their peak - there is a question mark over if a Halifax RS @5.5% fixed will still be available in 6 months time when your old RS would mature (2) My "sort of" easy access accounts are rising - YBS loyalty 6 access e saver (NLA) is going up to 3.75% soon and YBS Loyalty 6 access e isa saver (which is flexible) is also going up to 4.25% so the "premium" that a 4.5% RS has is reducing. (3) I do not need to use up one of my withdrawals from my 6 access YBS accounts this month to fund my total RS SO`s at the beginning of next month if I withdraw £1517.63 including interest from old Halifax RS (it helps with cash flow).
  • where_are_we
    where_are_we Posts: 1,245 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    For those who decide to get the better 5.5% Halifax RS.
    Log on - click RS@4.5% account - click "more actions" - window appears on right - click "renew account" - scroll down to "everyday saver" - click "renew" - click "renew" again - confirm email address - continue - click "interest paid into this account" - continue - everyday saver with same sort code and account number is opened - if the ES with the interest paid up does not appear in your accounts log out and back in again. Move total ES balance to your current account and then on to where you want it to go. Open new RS@5.5% while still logged in by clicking "savings and investments" on left of "your accounts" page - click "compare savings" - click "fixed term" button - scroll down to RS@5.5% - "find out more" - and apply.

  • howryoo
    howryoo Posts: 222 Forumite
    Third Anniversary 100 Posts Name Dropper
    Eco_Miser said:
    howryoo said:
    Yes, but would you not benefit from Oct / Nov 2023 assuming EA rates remain the same?

    Also, I can't seem to track down that thread with those spreadsheet examples (sure it was red / orange highlighted cells?).


    Probably not, because they (the RSs) would have matured and been renewed at the prevailing rate at that point, if you just continued with them now.


    What I meant was if you renewed now, you'd benefit from securing the higher rate now from Oct / Nov 2023 for the remaining term to Mar 2024.


Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 352.1K Banking & Borrowing
  • 253.5K Reduce Debt & Boost Income
  • 454.2K Spending & Discounts
  • 245.1K Work, Benefits & Business
  • 600.7K Mortgages, Homes & Bills
  • 177.5K Life & Family
  • 258.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.