Interest Rates 🫤 should I stay or should I go now?

auser99

VXman said:

CompulsiveSaver said:

The way I see this is, if you can get a better rate and you are happy you understand the account you are going to and everything you need to get the better rate, why wouldn't you switch to a higher rate on your savings?

Because, as a regular saver with limits on what you can deposit each month it actually won't accure as much interest as the other savings account.

Are you meaning with the £15 a month fee the user mentioned?
As otherwise why wouldn't 7% on the maximum monthly deposit (£250) be a better bet than the current 4.65%?

sheslookinhot

auser99 said:

VXman said:

CompulsiveSaver said:

The way I see this is, if you can get a better rate and you are happy you understand the account you are going to and everything you need to get the better rate, why wouldn't you switch to a higher rate on your savings?

Because, as a regular saver with limits on what you can deposit each month it actually won't accure as much interest as the other savings account.

Are you meaning with the £15 a month fee the user mentioned?
As otherwise why wouldn't 7% on the maximum monthly deposit (£250) be a better bet than the current 4.65%?

Because it would return less interest.

CompulsiveSaver

VXman said:

CompulsiveSaver said:

The way I see this is, if you can get a better rate and you are happy you understand the account you are going to and everything you need to get the better rate, why wouldn't you switch to a higher rate on your savings?

Because, as a regular saver with limits on what you can deposit each month it actually won't accure as much interest as the other savings account.

But it would not make sense to expect to be able to transfer a lump sum from an easy access savings account to a regular saver, as they are different saving structures, if you slowly transfer multiple deposits into the regular saver over the you would effectively need both; having an instant access for most of the money saved, then transferring it into the regular saver on a monthly basis.  That does not change the fact if you have savings in an instant access savings account, and a regular saver with a higher interest rate, you could well be better off than leaving it all in the easy access account (although it would be slightly less hassle.)

auser99

sheslookinhot said:

auser99 said:

VXman said:

CompulsiveSaver said:

The way I see this is, if you can get a better rate and you are happy you understand the account you are going to and everything you need to get the better rate, why wouldn't you switch to a higher rate on your savings?

Because, as a regular saver with limits on what you can deposit each month it actually won't accure as much interest as the other savings account.

Are you meaning with the £15 a month fee the user mentioned?
As otherwise why wouldn't 7% on the maximum monthly deposit (£250) be a better bet than the current 4.65%?

Because it would return less interest.

Assuming we're not talking about the monthly fee element, in general if you compare like for like, say a single £250, you'll earn more in the 7% account than the 4.65% account.

It you have 3k in the 4.65% from day 1 it of couse out earns the 7% account over the year as that account can't have the full 3k until a year in. But that assumes that the rest of the money isn't earning anything until it gets dripped in so it's not a like for like comparison.

Barkin

This old chestnut again. Aaaagggghhhh! 

auser99

Barkin said:

This old chestnut again. Aaaagggghhhh! 

People must really wonder what the point of these high rate saver accounts is otherwise 

Barkin

auser99 said:

Barkin said:

This old chestnut again. Aaaagggghhhh! 

People must really wonder what the point of these high rate saver accounts is otherwise 

There is no point, obviously. 

It'd be a different story, of course, if 7% was more than 4.65%...

😅

icedms

lol see no wonder I 🤯 when trying to get my head round interest rates!

The regular saver doesn’t have a £15 fee, the £15 is the money coop give you each month for six months as long as you meet the savings criteria.

Thanks @exdoi your explanation of interest rates was really helpful.

But then @auser99 you bring in that the 7% regular saver will only be able to increase from £0 by £250 a month while the 4.65% account has £3500 to start with.

I am wondering should just save the £50 a month into the 7% regular saver and get the free £15 for six months.

Or should I transfer £250 a month from the 4.65% to the 7% account?

Thanks everyone for your responses 😊 

Barkin

icedms said:

I am wondering should just save the £50 a month into the 7% regular saver and get the free £15 for six months.

Or should I transfer £250 a month from the 4.65% to the 7% account?

The £250 paid into the regular saver earns 7% interest. That same £250, left where it is, earns 4.65%.

There's a calculator somewhere on this site that will demonstrate that, despite what some here are saying, moving £250/month from the 4.65% account to the 7% account will DEFINITELY make you more money.

Your call...

Edit - here ya go  https://www.moneysavingexpert.com/savings/regular-savings-calculator/

allegro120

icedms said:

lol see no wonder I 🤯 when trying to get my head round interest rates!

The regular saver doesn’t have a £15 fee, the £15 is the money coop give you each month for six months as long as you meet the savings criteria.

Thanks @exdoi your explanation of interest rates was really helpful.

But then @auser99 you bring in that the 7% regular saver will only be able to increase from £0 by £250 a month while the 4.65% account has £3500 to start with.

I am wondering should just save the £50 a month into the 7% regular saver and get the free £15 for six months.

Or should I transfer £250 a month from the 4.65% to the 7% account?

Thanks everyone for your responses 😊 

I think by "deposit £50 into your Regular Saver account each month" they mean "minimum £50" to get your free £15.  You will get more return if you transfer £250 from your 4.65% account.

I would also recommend to open a better Easy Access account.  There are plenty of EA accounts paying way above 4.65%.