Is the 7% First Direct Worth it?

TractorFactor

A while back, I was recommended to open a First Direct account so I can regularly put in the £300 max their 7% account.

I think at the end of the fixed term when the interest is paid, you get an extra £138 in interest if you've put the max in every month.

I have £2500 odd in a Chase account earning ~£10 a month in interest at the moment. This account has been supplying the First Direct account, which currently has £2700 in it.
So a combined total of £5200 in cash.

If I'd kept the £2500 and £2700 together, wouldn't have that netted more interest from Chase (at 4.1%) than splitting it between First Direct and Chase together?

I guess it's a bit too late now as I'm in the First Direct thing until the maturity date in January anyway.

ColdIron

No. 7.00% is greater than (a very poor) 4.10%

You are forgetting that not all the money is in the FD RS for the whole year

Play around with this, use the Drip Feed option

https://www.moneysavingexpert.com/savings/regular-savings-calculator/

dealyboy

No ... if you think about it you have been accruing interest at 7% per annum on an increasing portion of your £5,200 ... starting at £300 (the remainder £4,900 on the Chase rate 9 months ago) to the current £2,700 (£2,500 @ 4.1%) ... you have accrued interest on 45 months of £300 so far at the rate of 7%/12 and by the end of the term 78 months (£136.60).

If you had left it all with Chase you would have been worse off on those 78 months of interest on £300, by the virtue of being on an inferior rate.

Thumbs_Up

I’m not a great fanboy for regular savers, I mean £138 after 12 months, just doesn’t float my boat. Now having said that I have 3 regular savings accounts.

First direct – Just wanted the switch bonus (free money) Just might put in the minimum a month to keep them happy.

NatWest – It’s my spending account so it’s useful.

Coventry first saver – Pay in £1000 a month ( now your talking) Easy access too.

I can see how regular saver accounts works for some people, when savings rates were quite poor, and your feeding numerous accounts.

phillw

Thumbs_Up said:

Coventry first saver – Pay in £1000 a month ( now your talking) Easy access too.

Only issue 1 is easy access, issue 2 has a long notice period. Issue 1 is close to the rate of other easy access savers on the market now, so I may be pulling all the money out of mine.

Middle_of_the_Road

TractorFactor said:

Is the 7% First Direct Worth it?

YES.

Although with the relatively small amount you can put in any one of these monthly savers, it's not a huge overall gain. 

They do become worthwhile, if you have enough savings already to open and fund numerous regular savers.

I currently have 11, to which I deposit the maximum each month. Some on here have many more than that.

They are less profitable now though, as easy access rates have caught up and overtaken them in some cases. 

If a reg.saver rate is above 5.2%, it still works out better than leaving that regular deposit amount in an easy access account at 5.2%

dealyboy

@Middle_of_the_Road said:

TractorFactor said:

Is the 7% First Direct Worth it?

YES.

Although with the relatively small amount you can put in any one of these monthly savers, it's not a huge overall gain. 

They do become worthwhile, if you have enough savings already to open and fund numerous regular savers.

I currently have 11, to which I deposit the maximum each month. Some on here have many more than that.

They are less profitable now though, as easy access rates have caught up and overtaken them in some cases. 

If a reg.saver rate is above 5.2%, it still works out better than leaving that regular deposit amount in an easy access account at 5.2%

An RS may still be worth it even if it's below 5.2% if it's a fixed rate saver. The variable rate EA saver could go down if the BoE interest rates start to fall.

Middle_of_the_Road

dealyboy said:

@Middle_of_the_Road said:

TractorFactor said:

Is the 7% First Direct Worth it?

YES.

Although with the relatively small amount you can put in any one of these monthly savers, it's not a huge overall gain. 

They do become worthwhile, if you have enough savings already to open and fund numerous regular savers.

I currently have 11, to which I deposit the maximum each month. Some on here have many more than that.

They are less profitable now though, as easy access rates have caught up and overtaken them in some cases. 

If a reg.saver rate is above 5.2%, it still works out better than leaving that regular deposit amount in an easy access account at 5.2%

An RS may still be worth it even if it's below 5.2% if it's a fixed rate saver. The variable rate EA saver could go down if the BoE interest rates start to fall.

Another great reason to hold on to them, which I'd not considered.

masonic

dealyboy said:

@Middle_of_the_Road said:

TractorFactor said:

Is the 7% First Direct Worth it?

YES.

Although with the relatively small amount you can put in any one of these monthly savers, it's not a huge overall gain. 

They do become worthwhile, if you have enough savings already to open and fund numerous regular savers.

I currently have 11, to which I deposit the maximum each month. Some on here have many more than that.

They are less profitable now though, as easy access rates have caught up and overtaken them in some cases. 

If a reg.saver rate is above 5.2%, it still works out better than leaving that regular deposit amount in an easy access account at 5.2%

An RS may still be worth it even if it's below 5.2% if it's a fixed rate saver. The variable rate EA saver could go down if the BoE interest rates start to fall.

I have a HSBC 5% RS maturing soon. I'll probably not open a new one in the hope that the RS rate goes up before other rates come down.

Bridlington1

dealyboy said:

@Middle_of_the_Road said:

TractorFactor said:

Is the 7% First Direct Worth it?

YES.

Although with the relatively small amount you can put in any one of these monthly savers, it's not a huge overall gain. 

They do become worthwhile, if you have enough savings already to open and fund numerous regular savers.

I currently have 11, to which I deposit the maximum each month. Some on here have many more than that.

They are less profitable now though, as easy access rates have caught up and overtaken them in some cases. 

If a reg.saver rate is above 5.2%, it still works out better than leaving that regular deposit amount in an easy access account at 5.2%

An RS may still be worth it even if it's below 5.2% if it's a fixed rate saver. The variable rate EA saver could go down if the BoE interest rates start to fall.

In a similar vein a variable rate regular saver below 5.2% may be worth funding since the rate could rise in the future to above the top EA rates.

These days if I have spare funds in EA accounts I sometimes continue to fund variable rate regular savers paying slightly below my top EA account if I think the rate is likely to rise in the near future (though these regular savers typically get funded towards the end of the month).

JudgeDekker

First Direct isn't the bank it once was. I'm trying to phone them, and I've been listening to the hold music for 40 minutes. I know that nothing works any more in the UK and every company can get away with rubbish service because they are all as bad. It looks like first direct are just as bad as everyone else.