First direct Regular saver 13th payment?

FIREmenow

AmityNeon said:

FIREmenow said:

Someone posted a few months back that First Direct's system is based on a year starting in February, so assumes the first month is always 28 days. I started a new Reg Saver in June so recreated the standing order to be earlier to see what would happen (for science). Only one SO has come out so far, no issues yet.

The way their system works had a name, apologies to the poster - I can't remember the details but it was very comprehensive!

That was HSBC, but First Direct should also function in the same way. Payment windows are based on calendar months, but balances above the Maximum Monthly Balance (MMB) only earn interest at the standard saver rate. Each account month, the MMB increases by £300, and the first account month always has 28 days (i.e. the annual period in terms of days per month runs from February to January). I call it the 'displaced annual period'.

     Date     MMB     Balance
27-Jun-24   £300.00   £300.00
01-Jul-24   £300.00   £600.00
25-Jul-24   £600.00   £600.00

• 27/06/24 - Account opened with £300 deposit
• 01/07/24 - Second £300 deposit (via new standing order)
  • Payment window is based on calendar months so the second deposit can be made on 1st July, but the MMB has not increased so the second deposit earns interest at the standard saver rate.
• 25/07/24 - 28 days after account opening, the MMB increases, allowing the whole account balance to earn full interest.

TL;DR - Set and forget. Having a standard savings account already open can help expedite the maturity process.

Thanks! Apologies I couldn't remember or find your previous post.

I've deleted the SO and then set it up again 2 days earlier.  The drip-fed money is getting a higher rate of interest than the standard saver elsewhere.

FIREmenow

@AmityNeon do you happen to know whether the Maximum Monthly Balance increase, and therefore increased interest rate, takes immediate effect when it falls on a weekend? 

Wondering if there is a gain to making the SO an extra day earlier (on top of the current two days earlier) when the MMB is on a Saturday to get the money in the account the Friday before? Probably not worth it for a Sunday taking the hit on two days at the standard saver rate for one extra day at 7%. This is as opposed to the SO not coming out until Monday when it falls in a weekend and the new money missing two days at 7%.

I realise this is real tinkering at the edges stuff, I'm just curious, but I know some fellow posters enjoy the challenge of squeezing every penny out of their savings!

jaypers

Sometimes I am amazed how long certain threads continue to invoke continued debate 

AmityNeon

FIREmenow said:

@AmityNeon do you happen to know whether the Maximum Monthly Balance increase, and therefore increased interest rate, takes immediate effect when it falls on a weekend?

It's immediate. Weekends can't extend the number of days in a calendar monthly period. Likewise, payment windows (calendar months) also can't be extended by weekends. The weekend suspension is just a consequence of standing orders. The monthly periods always start with 28 days, then 31, then 30 etc. and an annual period is defined in the terms as 365 days (so leap years/days have no exceptional rule). 

zagfles

AmityNeon said:

FIREmenow said:

Someone posted a few months back that First Direct's system is based on a year starting in February, so assumes the first month is always 28 days. I started a new Reg Saver in June so recreated the standing order to be earlier to see what would happen (for science). Only one SO has come out so far, no issues yet.

The way their system works had a name, apologies to the poster - I can't remember the details but it was very comprehensive!

That was HSBC, but First Direct should also function in the same way. Payment windows are based on calendar months, but balances above the Maximum Monthly Balance (MMB) only earn interest at the standard saver rate. Each account month, the MMB increases by £300, and the first account month always has 28 days (i.e. the annual period in terms of days per month runs from February to January). I call it the 'displaced annual period'.

     Date     MMB     Balance
27-Jun-24   £300.00   £300.00
01-Jul-24   £300.00   £600.00
25-Jul-24   £600.00   £600.00

• 27/06/24 - Account opened with £300 deposit
• 01/07/24 - Second £300 deposit (via new standing order)
  • Payment window is based on calendar months so the second deposit can be made on 1st July, but the MMB has not increased so the second deposit earns interest at the standard saver rate.
• 25/07/24 - 28 days after account opening, the MMB increases, allowing the whole account balance to earn full interest.

TL;DR - Set and forget. Having a standard savings account already open can help expedite the maturity process.

What exactly is the point of this? You earn 7% interest on £300 for 2 extra days each month (25-27th), but instead you're only earning 2% for 24 days (1-24) each month. The MSE best buy easy access account is 5.2% so you beat this by 1.8% for 2 days each month but lose 3.2% for 24 days! 

I can see the point if you set the SO to 2 days earlier like someone else said. Then you'd earn 7% rather than the 5.2% you could have earned on an extra £300 for 2 days each month except the last netting you an amazing 32p a year over what you'd get in easy access. 

WillPS

wmb194 said:

WillPS said:

[Deleted User] said:

AmityNeon said:

FIREmenow said:

Someone posted a few months back that First Direct's system is based on a year starting in February, so assumes the first month is always 28 days. I started a new Reg Saver in June so recreated the standing order to be earlier to see what would happen (for science). Only one SO has come out so far, no issues yet.

The way their system works had a name, apologies to the poster - I can't remember the details but it was very comprehensive!

That was HSBC, but First Direct should also function in the same way. Payment windows are based on calendar months, but balances above the Maximum Monthly Balance (MMB) only earn interest at the standard saver rate. Each account month, the MMB increases by £300, and the first account month always has 28 days (i.e. the annual period in terms of days per month runs from February to January). I call it the 'displaced annual period'.

     Date     MMB     Balance
27-Jun-24   £300.00   £300.00
01-Jul-24   £300.00   £600.00
25-Jul-24   £600.00   £600.00

• 27/06/24 - Account opened with £300 deposit
• 01/07/24 - Second £300 deposit (via new standing order)
  • Payment window is based on calendar months so the second deposit can be made on 1st July, but the MMB has not increased so the second deposit earns interest at the standard saver rate.
• 25/07/24 - 28 days after account opening, the MMB increases, allowing the whole account balance to earn full interest.

TL;DR - Set and forget. Having a standard savings account already open can help expedite the maturity process.

So just set up a SO say for the 1st and forget about it for 12 months?

To be clear - you can't set up a standing order for this one, First Direct have to do it for you. Once created the day of the month it's taken can't be changed without creating a new regular saver.

No, you can do it yourself. First you delete the existing SO and then next day setup the new one. If you try to set it up immediately it won’t work.

That's interesting, thank you. My wife asked First Direct to adjust the date of the standing order and they said it couldn't be done; the only would be to close the recently opened account and start again.

AmityNeon

zagfles said:

AmityNeon said:

FIREmenow said:

Someone posted a few months back that First Direct's system is based on a year starting in February, so assumes the first month is always 28 days. I started a new Reg Saver in June so recreated the standing order to be earlier to see what would happen (for science). Only one SO has come out so far, no issues yet.

The way their system works had a name, apologies to the poster - I can't remember the details but it was very comprehensive!

That was HSBC, but First Direct should also function in the same way. Payment windows are based on calendar months, but balances above the Maximum Monthly Balance (MMB) only earn interest at the standard saver rate. Each account month, the MMB increases by £300, and the first account month always has 28 days (i.e. the annual period in terms of days per month runs from February to January). I call it the 'displaced annual period'.

     Date     MMB     Balance
27-Jun-24   £300.00   £300.00
01-Jul-24   £300.00   £600.00
25-Jul-24   £600.00   £600.00

• 27/06/24 - Account opened with £300 deposit
• 01/07/24 - Second £300 deposit (via new standing order)
  • Payment window is based on calendar months so the second deposit can be made on 1st July, but the MMB has not increased so the second deposit earns interest at the standard saver rate.
• 25/07/24 - 28 days after account opening, the MMB increases, allowing the whole account balance to earn full interest.

TL;DR - Set and forget. Having a standard savings account already open can help expedite the maturity process.

What exactly is the point of this? You earn 7% interest on £300 for 2 extra days each month (25-27th), but instead you're only earning 2% for 24 days (1-24) each month. The MSE best buy easy access account is 5.2% so you beat this by 1.8% for 2 days each month but lose 3.2% for 24 days! 

I can see the point if you set the SO to 2 days earlier like someone else said. Then you'd earn 7% rather than the 5.2% you could have earned on an extra £300 for 2 days each month except the last netting you an amazing 32p a year over what you'd get in easy access. 

Surely there are easier and less time consuming ways to earn 32p a year? 

It was illustrative to demonstrate how the 'displaced annual period' system works, in case two sentences of prose wasn't sufficient in explaining the concept; it certainly wasn't a recommendation of any sort, hence why I finished with a TL;DR of setting and forgetting.

masonic

WillPS said:

wmb194 said:

WillPS said:

[Deleted User] said:

AmityNeon said:

FIREmenow said:

Someone posted a few months back that First Direct's system is based on a year starting in February, so assumes the first month is always 28 days. I started a new Reg Saver in June so recreated the standing order to be earlier to see what would happen (for science). Only one SO has come out so far, no issues yet.

The way their system works had a name, apologies to the poster - I can't remember the details but it was very comprehensive!

That was HSBC, but First Direct should also function in the same way. Payment windows are based on calendar months, but balances above the Maximum Monthly Balance (MMB) only earn interest at the standard saver rate. Each account month, the MMB increases by £300, and the first account month always has 28 days (i.e. the annual period in terms of days per month runs from February to January). I call it the 'displaced annual period'.

     Date     MMB     Balance
27-Jun-24   £300.00   £300.00
01-Jul-24   £300.00   £600.00
25-Jul-24   £600.00   £600.00

• 27/06/24 - Account opened with £300 deposit
• 01/07/24 - Second £300 deposit (via new standing order)
  • Payment window is based on calendar months so the second deposit can be made on 1st July, but the MMB has not increased so the second deposit earns interest at the standard saver rate.
• 25/07/24 - 28 days after account opening, the MMB increases, allowing the whole account balance to earn full interest.

TL;DR - Set and forget. Having a standard savings account already open can help expedite the maturity process.

So just set up a SO say for the 1st and forget about it for 12 months?

To be clear - you can't set up a standing order for this one, First Direct have to do it for you. Once created the day of the month it's taken can't be changed without creating a new regular saver.

No, you can do it yourself. First you delete the existing SO and then next day setup the new one. If you try to set it up immediately it won’t work.

That's interesting, thank you. My wife asked First Direct to adjust the date of the standing order and they said it couldn't be done; the only would be to close the recently opened account and start again.

They would have meant that the T&Cs place this restriction on customers.

However, this isn't enforced. A bit like renewing certain Lloyds group regular savers without waiting for the original account year to expire.

In answer to the question what is the point, the only point I can think of is that the current account is non-interest-bearing, so if it is too much effort to move it elsewhere and back for a few days, it is better than leaving it sitting in the current account.

FIREmenow

AmityNeon said:

zagfles said:

AmityNeon said:

FIREmenow said:

Someone posted a few months back that First Direct's system is based on a year starting in February, so assumes the first month is always 28 days. I started a new Reg Saver in June so recreated the standing order to be earlier to see what would happen (for science). Only one SO has come out so far, no issues yet.

The way their system works had a name, apologies to the poster - I can't remember the details but it was very comprehensive!

That was HSBC, but First Direct should also function in the same way. Payment windows are based on calendar months, but balances above the Maximum Monthly Balance (MMB) only earn interest at the standard saver rate. Each account month, the MMB increases by £300, and the first account month always has 28 days (i.e. the annual period in terms of days per month runs from February to January). I call it the 'displaced annual period'.

     Date     MMB     Balance
27-Jun-24   £300.00   £300.00
01-Jul-24   £300.00   £600.00
25-Jul-24   £600.00   £600.00

• 27/06/24 - Account opened with £300 deposit
• 01/07/24 - Second £300 deposit (via new standing order)
  • Payment window is based on calendar months so the second deposit can be made on 1st July, but the MMB has not increased so the second deposit earns interest at the standard saver rate.
• 25/07/24 - 28 days after account opening, the MMB increases, allowing the whole account balance to earn full interest.

TL;DR - Set and forget. Having a standard savings account already open can help expedite the maturity process.

What exactly is the point of this? You earn 7% interest on £300 for 2 extra days each month (25-27th), but instead you're only earning 2% for 24 days (1-24) each month. The MSE best buy easy access account is 5.2% so you beat this by 1.8% for 2 days each month but lose 3.2% for 24 days! 

I can see the point if you set the SO to 2 days earlier like someone else said. Then you'd earn 7% rather than the 5.2% you could have earned on an extra £300 for 2 days each month except the last netting you an amazing 32p a year over what you'd get in easy access. 

Surely there are easier and less time consuming ways to earn 32p a year? 

It was illustrative to demonstrate how the 'displaced annual period' system works, in case two sentences of prose wasn't sufficient in explaining the concept; it certainly wasn't a recommendation of any sort, hence why I finished with a TL;DR of setting and forgetting.

I brought up the topic and appreciated the illustration @AmityNeon provided.

If we are splitting hairs on if this is worth doing, the two days earlier also accrues more interest every time the original date would have fallen on a weekend and been delayed until the next working day. So that's some more pennies 

zagfles

masonic said:

WillPS said:

wmb194 said:

WillPS said:

[Deleted User] said:

AmityNeon said:

FIREmenow said:

Someone posted a few months back that First Direct's system is based on a year starting in February, so assumes the first month is always 28 days. I started a new Reg Saver in June so recreated the standing order to be earlier to see what would happen (for science). Only one SO has come out so far, no issues yet.

The way their system works had a name, apologies to the poster - I can't remember the details but it was very comprehensive!

That was HSBC, but First Direct should also function in the same way. Payment windows are based on calendar months, but balances above the Maximum Monthly Balance (MMB) only earn interest at the standard saver rate. Each account month, the MMB increases by £300, and the first account month always has 28 days (i.e. the annual period in terms of days per month runs from February to January). I call it the 'displaced annual period'.

     Date     MMB     Balance
27-Jun-24   £300.00   £300.00
01-Jul-24   £300.00   £600.00
25-Jul-24   £600.00   £600.00

• 27/06/24 - Account opened with £300 deposit
• 01/07/24 - Second £300 deposit (via new standing order)
  • Payment window is based on calendar months so the second deposit can be made on 1st July, but the MMB has not increased so the second deposit earns interest at the standard saver rate.
• 25/07/24 - 28 days after account opening, the MMB increases, allowing the whole account balance to earn full interest.

TL;DR - Set and forget. Having a standard savings account already open can help expedite the maturity process.

So just set up a SO say for the 1st and forget about it for 12 months?

To be clear - you can't set up a standing order for this one, First Direct have to do it for you. Once created the day of the month it's taken can't be changed without creating a new regular saver.

No, you can do it yourself. First you delete the existing SO and then next day setup the new one. If you try to set it up immediately it won’t work.

That's interesting, thank you. My wife asked First Direct to adjust the date of the standing order and they said it couldn't be done; the only would be to close the recently opened account and start again.

They would have meant that the T&Cs place this restriction on customers.

However, this isn't enforced. A bit like renewing certain Lloyds group regular savers without waiting for the original account year to expire.

In answer to the question what is the point, the only point I can think of is that the current account is non-interest-bearing, so if it is too much effort to move it elsewhere and back for a few days, it is better than leaving it sitting in the current account.

So it violates the T&Cs but due to a glitch in the way the IT works it could earn you an extra 3p a month at the risk of the account being closed or the deposit being disqualified from interest because it doesn't comply with the T&Cs. 

I think I'll pass