Regular Savers - are they worth it?

Bazzalona13295

phillw said:

Fingerbobs said:
Oh my goodness, that's absolutely deplorable. OK, this is a common misconception about regular savers, but I really wouldn't expect a (supposedly) professional journalist to completely misunderstand them and perpetuate the misunderstanding. Terrible.

Some people only want a current account, a savings account and maybe a credit card.

When I tell people how many current accounts I have, I'm often asked whether you are allowed to have more than 1.

Yeah I got such a look the other day when I mentioned I had lets say a few!

Bazzalona13295

Maybe I'm being over simplistic (surely not a bad thing) but if you have an EA account at say 5% but can put 200 away at 8% per month and (in my case) 500 away at 7% per month surely the benefit is there for all to see?

By no means will RS accounts get you rich but any little extra amounts we can put away at higher rates has to be worth it.

AndyTh_2

Bazzalona13295 said:

Maybe I'm being over simplistic (surely not a bad thing) but if you have an EA account at say 5% but can put 200 away at 8% per month and (in my case) 500 away at 7% per month surely the benefit is there for all to see?

By no means will RS accounts get you rich but any little extra amounts we can put away at higher rates has to be worth it.

the common issue is they think of it as mutually exclusive, and don't consider where the money could be before it's in the regular saver.

Someone I know even tried to put the full amount in at the start in one regular saver (and wasn't reversed) and was surprised at the end it was lower interest as the product still considered it as the balance going up monthly.

masonic

Bazzalona13295 said:

Maybe I'm being over simplistic (surely not a bad thing) but if you have an EA account at say 5% but can put 200 away at 8% per month and (in my case) 500 away at 7% per month surely the benefit is there for all to see?

By no means will RS accounts get you rich but any little extra amounts we can put away at higher rates has to be worth it.

What trips up those who misunderstand these accounts is a failure to consider the earning potential of money waiting to be fed into the RS, or the fact saving monthly from income is going to generate less than the headline X% of the final balance.

Any comparison must be done on a like for like basis, then as you say, the difference is clear.

Bigwheels1111

Moved money from my Santander 5.2% easy access to my Chase 4.1% This morning.

Thus maximising potential interest.

To fund my,

First Direct 7% £300 Third of the month.

Skipton 7.5% £250 First of the month.

YBS 7% £500 First of the month.

Nationwide 8% £200 First of the month.

After my new DD have paid I think I will switch an account to Lloyds and get their Regular saver as well.

SJMALBA

SJMALBA said:

Fewer customers opting for regular savings deals despite interest up to 8%

https://www.thisismoney.co.uk/money/saving/article-12570103/Fewer-customers-opting-regular-savings-deals-despite-8.html

'... But the maximum a saver could earn from the Nationwide deal is £104 - meaning an underlying rate closer to 4.25 per cent, rather than 8 per cent.

The reason is the unique way interest is worked out on regular savers, where savers only get the headline rate for one month of the year, and get a fraction of it for the remaining 11.'

No wonder some people don't understand how regular savers work! 🤦🏻

Same 'journalist'...

https://www.thisismoney.co.uk/money/saving/article-12562451/Regular-saver-rates-8-arent-good-look-says-SAM-BARKER.html

🙄 

masonic

I see the comment about less cash being saved in them is repeated, but in a cost of living crisis where 1 in 5 people are using debt to finance essential living costs, it isn't any surprise their target audience is shrinking.

Those who are able to save a small amount each month from their income are being done a great disservice by this uninformed 'journalist'.

Albermarle

Bazzalona13295 said:

Maybe I'm being over simplistic (surely not a bad thing) but if you have an EA account at say 5% but can put 200 away at 8% per month and (in my case) 500 away at 7% per month surely the benefit is there for all to see?

By no means will RS accounts get you rich but any little extra amounts we can put away at higher rates has to be worth it.

You are overestimating the majority of the population's understanding of all these types of issues.

redpete

Bigwheels1111 said:

Moved money from my Santander 5.2% easy access to my Chase 4.1% This morning.

Thus maximising potential interest.

To fund my,

First Direct 7% £300 Third of the month.

Skipton 7.5% £250 First of the month.

YBS 7% £500 First of the month.

Nationwide 8% £200 First of the month.

After my new DD have paid I think I will switch an account to Lloyds and get their Regular saver as well.

Being semi-retired I can't rely on monthly disposable income to feed RSs so the drip feed from an Easy Access account is my preferred strategy. I've been prompted by a matured YBS RS ready to move into their current 7% version to check the numbers. I too use Chase as a feeder because I can schedule monthly transfers from Chase Savings to Chase Current account and from there to the various RSs. Checked the net interest from the savings and RS accounts over 12 month and it is 6.1% - which happens to be the rate from the top 1 yr fix on Raisin.

Strategy will work out for Nationwide 8% RS and top 5.1% EA (but that will need monthly manual faff to do the transfers).  Maybe time to pause new subscriptions to RSs.

ColdIron

You don't need to go via the current account. SOs work just fine from the savings account