8% Nationwide Regular Saver - 13 payments?

pfpf

i think the 13th payment is a red-herring. its all about getting the first £200 in on the last day of the month and your 2nd £200 in on the 1st day of month 2, thats where the extra payout comes from, £400 for a whole year instead of £200 for a whole year.

masonic

No sane moneysaver would open this regular saver on say the 29th September, then fund monthly on 29th of each month until August, and only then stick their 13th £200 in on 1st September 2024.

What a true moneysaver would do is make their second payment on 1st October, then the first of each subsequent month.

That is the difference between Rollinghome's scenario and the one others are advocating - and it makes quite a difference to the final outcome.

So in short, Rollinghome is quite right not to want to earn next to nothing doing it the wrong way, and everyone else is also quite right to want to earn extra £ doing it correctly.

ColdIron

EthicsGradient said:

Rollinghome said:

EthicsGradient said:

Rollinghome said:

EthicsGradient said:

Rollinghome said:

WillPS said:

Rollinghome said:

ColdIron said:

No, you can get an extra £16. Discussed at length in this thread

How so?  I pay in £200 on the first day of the last month.  I get paid 8.00% on that until just less than a month until the account is closed.  8.00% is 2.80% more than 5.2% I get from the EA account.  2.80% on £200 for a year is £5.60 for a full year.  For the just one month (it would have to be less) before the account matures, is £5.60/12 = 0.47p.

Because, timed correctly, you can make 2 x £200 payments at the beginning of the term. The additional £200 payment is worth (up to) £16 in interest upon maturity. The difference with the Santander Easy Access is £5.60.

And that's nothing to do with what I said. The final £200 can only earn interest for less than 1 month. 

So for £200 at 8.00% interest for a full year would be £16.00.  For just one month, the interest on that £200 would be £16.00/12 = £1.33. Not £16.00.

But then that doesn't take into account the interest that would be lost by the account the payment was made from. If from an account already paying 5.2% then the gain would be just £0.47p.  

If you are trying to work out how much extra you get over an ordinary EA account you need to take into account the interest the EA account pays. (You may also lose extra days if the money is sitting in a current account waiting for a SO to pay.)

To put it another way, if you left that final £200 in your 5.2% EA account instead of transferring it to your 8.00% RS account, you'd only get 47p less.

As with the misunderstanding around RSs only paying half the stated rate, you only get interest for the time your money is in the account. You don't get 12 months interest for money that's only in the account for one month.

But you're not taking into account the extra interest other payments are getting from being paid on the first of each month. Open one today; 1st payment will be in for 366 days. You can then make your second payment on 1st October (tomorrow) so that's in for 365 days. 3rd is in for 334 days, and so on. Effectively, you've made 2 payments that get about a year, 1 for 11 months, and so on, up to the 13th payment in for a month (there's 1 day less on each of those (eg 1st Oct 2023 to 30th Sept 2024), but that is more than made up for by the the extra payment in for a full year).

So that'd be about £15 above a no-interest account, taking off a little for the day difference; about £5.50 above the best easy access account.

You've missed the point.  You can still pay in on the first day of the month if you want to.  Whatever you do, you'll still only get a maximum of 1 month's interest on money that's only there for the last month before the account matures. There's no magic.

As for the old and much repeated "wait till the last day of the month before opening" wheeze, remember to take into account the interest lost by keeping money in a lower paying account while waiting for the end of the month. The timing is also a bit more complicated than you suggest, e.g. if the rate is competitive on 2 Oct but less competitive in 12 months time. Delaying then gives you less time when the rate is competitive.

No, sorry, everyone else understands it, and you don't. We've all tried explaining it to you, but you're clearly not going to get it, however it's put. That's OK - it's not as if it's you contemplating whether to use it, so it doesn't matter.

"remember to take into account the interest lost by keeping money in a lower paying account while waiting for the end of the month" - well, that's a different scenario. Everyone has been talking about starting the account in the past few days or today (if it can still be opened on a Saturday - anyone had luck?), ie at the end of a month, without waiting.

Well, Coldiron gets the point being made now, see his post on the previous page, so I'm not sure why you still don't. I suggest you read through the relevant posts again.  

To repeat, it's about the value of making a 13th payment as referred to in the thread title.  Not about the value of doubling up the initial payment as soon as possible. (Though that too, is more complicated by other factors than you seem to realise.)   Nor do you need to do the sums for anyone, it's a "wheeze" that's been espoused ever since RS accounts have been around.

In answer to your question, any account with Nationwide can be opened on any day of the week.

I know you're not interested, but by now, the important thing is that no one else should be put off opening an account and funding it today, and then funding it on the 1st of each subsequent month, just because you can't understand.

This is an important point

I'm not fussed about being misquoted and all the rest of it, but within only 7 minutes of rollinghome making their initial post another poster asked this:

With this account would it be worth doing what I intend doing with my Skipton 7.5% monthly saver only funding it in the earlier months. For example with the Skipton 1st payment attracts 7.5% over a year.  Next payment attracts 11/12ths of 7.5% and so on until it's not worth putting any more in once you get to the sixth month

Now I'm not suggesting that one is a consequence of the other in this case but it's easy to see how talk of not funding the last, or last few, months can perpetuate this common mistake

For enquiring minds, I am beginning to reassess the value of that final Hot Wing

Rollinghome

pfpf said:

i think the 13th payment is a red-herring. its all about getting the first £200 in on the last day of the month and your 2nd £200 in on the 1st day of month 2, thats where the extra payout comes from, £400 for a whole year instead of £200 for a whole year.

Agreed.  That can be more complicated than it sounds, but let's not go there. The most straightforward approach is to get as much cash earning as much as possible, as soon as possible.  The idea of holding cash earning a poor rate back, waiting for the end of the month to open a RS account, might not always pay off and depend on what rates do and how long you keep the RS account.

zagfles

I know this thread is getting very anal but just to add - it's perfectly possible to earn nearly a full year's interest on the 13th payment

Section62

Rollinghome said:

ColdIron said:

Rollinghome said:

ColdIron said:

Rollinghome said:

WillPS said:

Rollinghome said:

ColdIron said:

No, you can get an extra £16. Discussed at length in this thread

How so?  I pay in £200 on the first day of the last month.  I get paid 8.00% on that until just less than a month until the account is closed.  8.00% is 2.80% more than 5.2% I get from the EA account.  2.80% on £200 for a year is £5.60 for a full year.  For the just one month (it would have to be less) before the account matures, is £5.60/12 = 0.47p.

Because, timed correctly, you can make 2 x £200 payments at the beginning of the term. The additional £200 payment is worth (up to) £16 in interest upon maturity. The difference with the Santander Easy Access is £5.60.

And that's nothing to do with what I said. The final £200 can only earn interest for less than 1 month. 
[SNIP]

As with the misunderstanding around RSs only paying half the stated rate, you only get interest for the time your money is in the account. You don't get 12 months interest for money that's only in the account for one month.

You are focussing on the final payment in isolation

Certainly the difference on that 13th £200 is only £0.47. If you didn't make the final payment and kept it in a 5.20% account you would only be poorer by about the cost of a ketchup sachet at your local chippy

But it would be unsound to consider it in isolation

The major benefit of these 'calendar month' accounts is not the final, or 13th, payment but the first

Timed well they allow you to increase the monthly balance for the first (ish) month and every subsequent month by £200. This, as I said earlier, would result in roughly an extra £16 for the term

You could buy a cod and chips, a battered sausage and a cup of tea for that

Yes, absolutely concentrating on the final 13th payment. The title of this thread is "8% Nationwide Regular Saver - 13 payments?". 

Yes, and the ability to make 13 payments is worth about £16

However the title of the thread is not "8% Nationwide Regular Saver - 13th and final payment?"

And the point that you now seem to agree is that making that final 13th payment is worth a tad more than zilch,

Well I don't think anybody has disputed that the value of the final (as opposed to the first) is low

But would this not equally apply to all regular savers? There is nothing unique to Nationwide or any other RS in that regard

You might equally say that paying in £200 rather than £199 is worth a tad more than zilch. It is self evidently true and requires no explanation so hardly worthy of discussion. If you have a point beyond that I'm afraid I can't see it

so why all the fuss about it. 

Why indeed. I may upgrade myself to a KFC bucket of bits after all this excitement

 Really? How can the 13th payment of £200, that will be in your account for just one month at most, be worth £16? You've already admitted (see previous page) that it would earn you about 47p net, as much as a sachet of KFC sauce.

Yes, of course it would equally apply to all RS accounts. Who would think otherwise?

Yes, it is "self-evidently true" (I hope, but who can be sure around here) that paying in less would earn less. So who would bother to say that?  (This all sounds like a way to divert attention from what has been said.)

Yes, why are there 7+ pages about paying in a 13th payment to be in the account for less than a month at most?  I'd remind you that it was you who decided to contradict the one short post I made, by claiming:  

No, you can get an extra £16. Discussed at length in this thread

Not from adding that last £200 for less than a month you can't.  And then in a later post:

Certainly the difference on that 13th £200 is only £0.47.

If people are going to be told what a clever wheeze it is to make that 13th payment, then let's be honest about how much difference it actually makes.

Enjoy your KFC bucket.

You are taking "13th payment" too literally and overly focussing on the interest earned on the deposit which comes 13th in the sequence.

There are some situations where the ability to make that 13th payment is important to some (e.g. on a high interest rate where the account matures near the end of a calender month).

But the "13th payment" question also acts as a shorthand for accounts (like this one) where it is possible to make 13 deposits because the duration the account is open spans 13 calendar months and there are no explicit T&Cs either probiting more than 12 deposits, or exceeding a balance of £x.

As has been patiently explained, the value from these "13th payment" accounts is in the ability to make two early maximum deposits within days of each other, leading to nearly a year's worth of interest on a double deposit.

To put it in different terms - if the account's T&C's allowed an initial deposit of £400 followed by a maximum of £200 in subsequent months, would anyone here decline the option of depositing £400 and instead self-limit the first deposit to £200, because the interest on the final month's deposit wasn't very much?  This would of course be a very un-MSE thing to do (here I am assuming the account holder had the funds to deposit in the first place).

zagfles

It might help if NW didn't call the account a regular saver. It isn't a regular saver. It's a high interest account with deposit limits. You can use it like a regular saver, but you could use it in other ways too. 

Section62

zagfles said:

It might help if NW didn't call the account a regular saver. It isn't a regular saver. It's a high interest account with deposit limits. You can use it like a regular saver, but you could use it in other ways too. 

When they previously pulled their RS account from sale they said (amongst other things) that it was attracting the wrong kind of savers... hence the later creation of the StS account.

Seems apt to now try attracting the wrong kind of savers again, using an account that might be said to have the wrong kind of name.

friolento

zagfles said:

It might help if NW didn't call the account a regular saver. It isn't a regular saver. It's a high interest account with deposit limits. You can use it like a regular saver, but you could use it in other ways too. 

high interest account with deposit limits is what I know as regular saver

Rollinghome

Section62 said:

Rollinghome said:

ColdIron said:

Rollinghome said:

ColdIron said:

Rollinghome said:

WillPS said:

Rollinghome said:

ColdIron said:

No, you can get an extra £16. Discussed at length in this thread

How so?  I pay in £200 on the first day of the last month.  I get paid 8.00% on that until just less than a month until the account is closed.  8.00% is 2.80% more than 5.2% I get from the EA account.  2.80% on £200 for a year is £5.60 for a full year.  For the just one month (it would have to be less) before the account matures, is £5.60/12 = 0.47p.

Because, timed correctly, you can make 2 x £200 payments at the beginning of the term. The additional £200 payment is worth (up to) £16 in interest upon maturity. The difference with the Santander Easy Access is £5.60.

And that's nothing to do with what I said. The final £200 can only earn interest for less than 1 month. 
[SNIP]

As with the misunderstanding around RSs only paying half the stated rate, you only get interest for the time your money is in the account. You don't get 12 months interest for money that's only in the account for one month.

You are focussing on the final payment in isolation

Certainly the difference on that 13th £200 is only £0.47. If you didn't make the final payment and kept it in a 5.20% account you would only be poorer by about the cost of a ketchup sachet at your local chippy

But it would be unsound to consider it in isolation

The major benefit of these 'calendar month' accounts is not the final, or 13th, payment but the first

Timed well they allow you to increase the monthly balance for the first (ish) month and every subsequent month by £200. This, as I said earlier, would result in roughly an extra £16 for the term

You could buy a cod and chips, a battered sausage and a cup of tea for that

Yes, absolutely concentrating on the final 13th payment. The title of this thread is "8% Nationwide Regular Saver - 13 payments?". 

Yes, and the ability to make 13 payments is worth about £16

However the title of the thread is not "8% Nationwide Regular Saver - 13th and final payment?"

And the point that you now seem to agree is that making that final 13th payment is worth a tad more than zilch,

Well I don't think anybody has disputed that the value of the final (as opposed to the first) is low

But would this not equally apply to all regular savers? There is nothing unique to Nationwide or any other RS in that regard

You might equally say that paying in £200 rather than £199 is worth a tad more than zilch. It is self evidently true and requires no explanation so hardly worthy of discussion. If you have a point beyond that I'm afraid I can't see it

so why all the fuss about it. 

Why indeed. I may upgrade myself to a KFC bucket of bits after all this excitement

 Really? How can the 13th payment of £200, that will be in your account for just one month at most, be worth £16? You've already admitted (see previous page) that it would earn you about 47p net, as much as a sachet of KFC sauce.

Yes, of course it would equally apply to all RS accounts. Who would think otherwise?

Yes, it is "self-evidently true" (I hope, but who can be sure around here) that paying in less would earn less. So who would bother to say that?  (This all sounds like a way to divert attention from what has been said.)

Yes, why are there 7+ pages about paying in a 13th payment to be in the account for less than a month at most?  I'd remind you that it was you who decided to contradict the one short post I made, by claiming:  

No, you can get an extra £16. Discussed at length in this thread

Not from adding that last £200 for less than a month you can't.  And then in a later post:

Certainly the difference on that 13th £200 is only £0.47.

If people are going to be told what a clever wheeze it is to make that 13th payment, then let's be honest about how much difference it actually makes.

Enjoy your KFC bucket.

You are taking "13th payment" too literally and overly focussing on the interest earned on the deposit which comes 13th in the sequence.

There are some situations where the ability to make that 13th payment is important to some (e.g. on a high interest rate where the account matures near the end of a calender month).

But the "13th payment" question also acts as a shorthand for accounts (like this one) where it is possible to make 13 deposits because the duration the account is open spans 13 calendar months and there are no explicit T&Cs either probiting more than 12 deposits, or exceeding a balance of £x.

As has been patiently explained, the value from these "13th payment" accounts is in the ability to make two early maximum deposits within days of each other, leading to nearly a year's worth of interest on a double deposit.

To put it in different terms - if the account's T&C's allowed an initial deposit of £400 followed by a maximum of £200 in subsequent months, would anyone here decline the option of depositing £400 and instead self-limit the first deposit to £200, because the interest on the final month's deposit wasn't very much?  This would of course be a very un-MSE thing to do (here I am assuming the account holder had the funds to deposit in the first place).

Now you are just being silly.  We all know how RS accounts work, thank you very much.