First Direct 7% con

WillPS

kimwp said:

Bigwheels1111 said:

surreysaver said:

Bigwheels1111 said:

Organgrinder said:

I'm a maths teacher and might use this as a test question.

Last Direct advertise a savings rate that pays 7% interest per annum. You are allowed to pay £250 into your account each month. John says at the end of the year he'll have earned £210 in interest. Explain why John is incorrect.

£300 a month.

HSBC is £250

Up to £300pm. It could be £250

I only had 13 this year, all RS maxed out.
Can’t wait to renew as many as possible.
Don’t see the point if not maxed out, those that are over 5.5% that is.

I did ponder at one point opening lots of regular savers to push most of my cash in over the first couple of months, then reducing the contributions to the minimum, which would actually gain more interest than maxing them.

(In the end, there were so many hoops of direct debits and pushing money through current accounts to open them all for fairly small gains that I just stuck with the ones that took minimal set up effort).

Bit surprised tbh that you can satisfy all the requirements with £4k take-home!

Can't think of any regular savers which require current accounts with DDs?

TSB, Natwest, RBS, Co-op, TSB, Bank of Scotland and Nationwide just require a current account to be held, no funding necessary. First Direct is the same, although the standing order has to be from FD so you will need to make sure the deposit is in your 1st Account for that one - so while not a deposit requirement, you would have to fund it to benefit.

Club Lloyds requires a Club Lloyds account, which has a £3 fee waived if you transfer £2k in/out. Not exactly tricky, especially since it's gets you a freebie too! (In fact, you probably could get away with just downgrading to Classic after you'd opened the Reg Saver, because Lloyds don't seem to close or downgrade regular savers which have already been opened.)

Halifax and all the building societies (except Nationwide) have no requirement to hold current accounts at all, leave alone DDs.

What am I missing?

Bigwheels1111

kimwp said:

Bigwheels1111 said:

surreysaver said:

Bigwheels1111 said:

Organgrinder said:

I'm a maths teacher and might use this as a test question.

Last Direct advertise a savings rate that pays 7% interest per annum. You are allowed to pay £250 into your account each month. John says at the end of the year he'll have earned £210 in interest. Explain why John is incorrect.

£300 a month.

HSBC is £250

Up to £300pm. It could be £250

I only had 13 this year, all RS maxed out.
Can’t wait to renew as many as possible.
Don’t see the point if not maxed out, those that are over 5.5% that is.

I did ponder at one point opening lots of regular savers to push most of my cash in over the first couple of months, then reducing the contributions to the minimum, which would actually gain more interest than maxing them.

(In the end, there were so many hoops of direct debits and pushing money through current accounts to open them all for fairly small gains that I just stuck with the ones that took minimal set up effort).

Bit surprised tbh that you can satisfy all the requirements with £4k take-home!

Most don't ask, If they do I put savings and House money.

They seem to be happy with that.

flaneurs_lobster

kimwp said:

I did ponder at one point opening lots of regular savers to push most of my cash in over the first couple of months, then reducing the contributions to the minimum, which would actually gain more interest than maxing them.

[my bold]

How? Where is the extra interest generated from that isn't gained by maximising deposits into the regular savers?

Barkin

flaneurs_lobster said:

kimwp said:

I did ponder at one point opening lots of regular savers to push most of my cash in over the first couple of months, then reducing the contributions to the minimum, which would actually gain more interest than maxing them.

[my bold]

How? Where is the extra interest generated from that isn't gained by maximising deposits into the regular savers?

Extreme example, for illustration purposes:

12 RS's with £250 in them for 12 months, versus 1 account with £250 added every month for 12 months... 

jameseonline

WillPS said:

kimwp said:

Bigwheels1111 said:

surreysaver said:

Bigwheels1111 said:

Organgrinder said:

I'm a maths teacher and might use this as a test question.

Last Direct advertise a savings rate that pays 7% interest per annum. You are allowed to pay £250 into your account each month. John says at the end of the year he'll have earned £210 in interest. Explain why John is incorrect.

£300 a month.

HSBC is £250

Up to £300pm. It could be £250

I only had 13 this year, all RS maxed out.
Can’t wait to renew as many as possible.
Don’t see the point if not maxed out, those that are over 5.5% that is.

I did ponder at one point opening lots of regular savers to push most of my cash in over the first couple of months, then reducing the contributions to the minimum, which would actually gain more interest than maxing them.

(In the end, there were so many hoops of direct debits and pushing money through current accounts to open them all for fairly small gains that I just stuck with the ones that took minimal set up effort).

Bit surprised tbh that you can satisfy all the requirements with £4k take-home!

Can't think of any regular savers which require current accounts with DDs?

TSB, Natwest, RBS, Co-op, TSB, Bank of Scotland and Nationwide just require a current account to be held, no funding necessary. First Direct is the same, although the standing order has to be from FD so you will need to make sure the deposit is in your 1st Account for that one - so while not a deposit requirement, you would have to fund it to benefit.

Club Lloyds requires a Club Lloyds account, which has a £3 fee waived if you transfer £2k in/out. Not exactly tricky, especially since it's gets you a freebie too! (In fact, you probably could get away with just downgrading to Classic after you'd opened the Reg Saver, because Lloyds don't seem to close or downgrade regular savers which have already been opened.)

Halifax and all the building societies (except Nationwide) have no requirement to hold current accounts at all, leave alone DDs.

What am I missing?

Probably?

You definitely lose the freebie immediately if you downgrade.

I'm not risking starting a Club Lloyds Regular should I need to downgrade etc later on.

You can only open 1 of each Lloyds Regular per year.

WillPS

jameseonline said:

Probably?

You definitely lose the freebie immediately if you downgrade.

I'm not risking starting a Club Lloyds Regular should I need to downgrade etc later on.

You can only open 1 of each Lloyds Regular per year.

You definitely lose the freebie. You definitely don't lose any open Club Lloyds Monthly Savers.

The 'probably get away with it' is more considering that excessive account actions (be it opening, switching/closing, changing account type etc) seems to be a trigger for these dreaded manual account reviews which are a precursor to getting permabanned by LBG. I personally wouldn't risk it.

AmityNeon

Barkin said:

flaneurs_lobster said:

kimwp said:

I did ponder at one point opening lots of regular savers to push most of my cash in over the first couple of months, then reducing the contributions to the minimum, which would actually gain more interest than maxing them.

[my bold]

How? Where is the extra interest generated from that isn't gained by maximising deposits into the regular savers?

Extreme example, for illustration purposes:

12 RS's with £250 in them for 12 months, versus 1 account with £250 added every month for 12 months...

"More interest than maxing them" suggests the same number of accounts are open in both scenarios, so it's strange that deliberately reducing contributions to the minimum results in a net positive.

WillPS

I think what they're saying is if they had a (presumably 4 figure?) lump sum, then it works out better to spread the whole lot out over several regular savers than to drip feed it in to one - as even though the average is lower than the headline, it's earning that for the whole 12 months.

It makes less of a difference if in the '1 regular saver' option the balance is held in a 5+% easy access saver tho.

kimwp

AmityNeon said:

Barkin said:

flaneurs_lobster said:

kimwp said:

I did ponder at one point opening lots of regular savers to push most of my cash in over the first couple of months, then reducing the contributions to the minimum, which would actually gain more interest than maxing them.

[my bold]

How? Where is the extra interest generated from that isn't gained by maximising deposits into the regular savers?

Extreme example, for illustration purposes:

12 RS's with £250 in them for 12 months, versus 1 account with £250 added every month for 12 months...

"More interest than maxing them" suggests the same number of accounts are open in both scenarios, so it's strange that deliberately reducing contributions to the minimum results in a net positive.

Adding in the implied bits- 

I did ponder at one point opening lots (more than I would open if I was going to max them) of regular savers to push most of my cash in over the first couple of months, then reducing the contributions to the minimum, which would actually gain more interest than maxing them (fewer regular savings accounts).

"Them" being the number of regular savings accounts I would have in each scenario.

kimwp

WillPS said:

kimwp said:

Bigwheels1111 said:

surreysaver said:

Bigwheels1111 said:

Organgrinder said:

I'm a maths teacher and might use this as a test question.

Last Direct advertise a savings rate that pays 7% interest per annum. You are allowed to pay £250 into your account each month. John says at the end of the year he'll have earned £210 in interest. Explain why John is incorrect.

£300 a month.

HSBC is £250

Up to £300pm. It could be £250

I only had 13 this year, all RS maxed out.
Can’t wait to renew as many as possible.
Don’t see the point if not maxed out, those that are over 5.5% that is.

I did ponder at one point opening lots of regular savers to push most of my cash in over the first couple of months, then reducing the contributions to the minimum, which would actually gain more interest than maxing them.

(In the end, there were so many hoops of direct debits and pushing money through current accounts to open them all for fairly small gains that I just stuck with the ones that took minimal set up effort).

Bit surprised tbh that you can satisfy all the requirements with £4k take-home!

Can't think of any regular savers which require current accounts with DDs?

TSB, Natwest, RBS, Co-op, TSB, Bank of Scotland and Nationwide just require a current account to be held, no funding necessary. First Direct is the same, although the standing order has to be from FD so you will need to make sure the deposit is in your 1st Account for that one - so while not a deposit requirement, you would have to fund it to benefit.

Club Lloyds requires a Club Lloyds account, which has a £3 fee waived if you transfer £2k in/out. Not exactly tricky, especially since it's gets you a freebie too! (In fact, you probably could get away with just downgrading to Classic after you'd opened the Reg Saver, because Lloyds don't seem to close or downgrade regular savers which have already been opened.)

Halifax and all the building societies (except Nationwide) have no requirement to hold current accounts at all, leave alone DDs.

What am I missing?

This was when I was looking at them last year.