Regular saver account

madlyn

I currently have a Tandem EA account with around £1600 in it.
I had an email from them earlier in the week to say that the rate was dropping from 5% to 4.5% i think. So I'm thinking of opening a regular saver, well two actually.
Both are with principality BS, 5.5% fixed for 2 years with a max monthly deposit of £50, the other is also 5.5% fixed for 1 year with a max monthly deposit of £250.
My plan is to drip feed from my Tandem account into the RS account. But do I just open 1 which would probably be the 12 month one, or open both so I have 2 that will mature even though it will be a year apart?

boingy

The 2 year one is barely worth doing because of the £50 per month limit. You'd probably be better off putting your lump sum into a fixed rate savings at a higher interest rate than Tandem's EA.

Or take a look at Nationwide and First Direct for regular savers that pay 8% and 7% respectively. 

housebuyer143

That's some poor regular saver rates. You can get 7% with first direct, 6.17% with NatWest, more with YBS and can put more in. Look around.
Failing that you can get notice accounts around 5.5% mark.

saverkev

Have a look at this Regular Savings Forum
First pages list current rates

https://forums.moneysavingexpert.com/discussion/6106986/regular-savings-accounts-the-best-currently-available-list/p1

Bridlington1

First of all the Tandem EA account will reduce from 5% to 4.9% in March (the underlying rate of 4.65% remains unchanged but it is the top up that will reduce from 0.35% to 0.25%).

Secondly it would be a good idea to drip-feed your money into regular savers, though as others have mentioned it would probably be worth looking at higher paying regular savers first, an up to date list can be found on Moneyfacts. Do you still bank with Nationwide and NatWest? If so then it would make sense to open their 8% regular saver instead.

By all means though open other regular savers elsewhere too, many (though not all) regular savers allow penalty free withdrawals/early closure if needed. If interest rates drop in the near future the 6% Principality RS could become quite competitive over the next year or two so it could be worth opening this with the minimum balance even if you don't use it much afterwards given that the rate is fixed for 2 years.

madlyn

I do bank with the nationwide and the only thing putting me off their offering is that it is a variable rate.

Middle_of_the_Road

madlyn said:

I do bank with the nationwide and the only thing putting me off their offering is that it is a variable rate.

Even if the rate was reduced, it would probably still be better than other options, even some fixed rate reg. savers.
Also, I don't see it being reduced any time soon, going by the forecasts regarding the timeline of base rate reductions.
It would seem a far better option than the two accounts you were considering originally, especially as you bank with Nationwide.

wmb194

madlyn said:

I do bank with the nationwide and the only thing putting me off their offering is that it is a variable rate.

It's instant access* with no penalty and there's also no penalty to close it early so if it becomes uncompetitive it's really not a problem.

*Max three withdrawals per year.

35har1old

madlyn said:

I currently have a Tandem EA account with around £1600 in it.
I had an email from them earlier in the week to say that the rate was dropping from 5% to 4.5% i think. So I'm thinking of opening a regular saver, well two actually.
Both are with principality BS, 5.5% fixed for 2 years with a max monthly deposit of £50, the other is also 5.5% fixed for 1 year with a max monthly deposit of £250.
My plan is to drip feed from my Tandem account into the RS account. But do I just open 1 which would probably be the 12 month one, or open both so I have 2 that will mature even though it will be a year apart?

The rate for the two year is 6%

allegro120

madlyn said:

I do bank with the nationwide and the only thing putting me off their offering is that it is a variable rate.

Yes they might reduce the rate, but if they do I doubt the drop will be dramatic.  It is more likely that they will close this issue for new applicants and introduce a new one with lower rate. I'd open it whilst it's still available and if they do drop the rate too far down you can always close the account and put your money into more competitive product.

madlyn

Thank you everyone for your replies.
I've opened the Nationwide one and the 2 year one with Principality BS.