First direct Regular saver 13th payment?

AmityNeon

zagfles said:

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 

Again, the recommendation is to just set and forget because most would not care about this, but @FIREmenow brought the topic up for their own curiosity.

Page 37 of First Direct's Account Terms and Conditions state the following:

Interest: We work out interest each day on the balance and pay it on the anniversary of the account opening. If you close the account early, we’ll pay you interest at the relevant Savings Account rate. If you save more than the Maximum Monthly Balance, we’ll pay you interest on the extra at the relevant Savings Account rate.

Considering this explicit contingency, and the absence of any other specified punitive measures for failing to strictly comply with the terms under 'Paying in by standing order', it's unlikely that deposits above the MMB would be "disqualified" from interest.

Not that I would recommend the following, but I contravened numerous HSBC RS T&Cs by cancelling the standing order, making internal transfers on the first of each month, and then failing to meet the minimum monthly deposits when 5% became lacklustre. When I queried why interest was less than expected, I was eventually compensated far in excess of the account's annual estimated interest, at the behest of the FOS, due to HSBC's atrocious handling of my query-turned-complaint. That was never my intention, but the entire experience led to my discovery of their underlying technical implementation and the 'displaced' annual period (the reason for the interest discrepancy which they never did manage to explain).

masonic

zagfles said:

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 

For the avoidance of doubt, nobody is trying to persuade you to do this.

zagfles

masonic said:

zagfles said:

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 

For the avoidance of doubt, nobody is trying to persuade you to do this.

For the avoidance of doubt, I didn't think anyone was, hence the smiley 

ThePirates

Once my FD Saver matures is there a 'best date' to restart, I've heard some people say the 1st, others the 3rd. Are we 'just' talking a few pence on interest over the year?

zagfles

ThePirates said:

Once my FD Saver matures is there a 'best date' to restart, I've heard some people say the 1st, others the 3rd. Are we 'just' talking a few pence on interest over the year?

Usually best to open it as soon as you can, otherwise you'll lose out on high interest for the days you delay.

I can't see the date of the month making any difference anyway, except perhaps the 31st, not sure how they handle the SOs then, whether shorter months they take the SO on the 30th/28th? 

Feb will be the best month to open but obviously it'd be daft to wait till then and miss out of half a year's interest in order to earn a few days extra interest. 

AmityNeon

ThePirates said:

Once my FD Saver matures is there a 'best date' to restart, I've heard some people say the 1st, others the 3rd. Are we 'just' talking a few pence on interest over the year?

You could perhaps ensure the date of maturity falls on a weekday, or at least not at the beginning of an extended weekend. My last FD RS matured on Saturday (30th Dec) with the new one opened the next day (Sunday), but I did have an existing standard saver open and I monitored the visibility of my accounts, applying for the new RS when the maturing RS disappeared from my account list (but before receiving the matured balance).

zagfles said:

I can't see the date of the month making any difference anyway, except perhaps the 31st, not sure how they handle the SOs then, whether shorter months they take the SO on the 30th/28th?

The date of the standing order remains unchanged but shorter months lacking said date will not include a payment, and instead, subsequent months will include two payments. (Incidentally, this also contravenes the terms under 'Paying in by standing order' but obviously, nothing happens.)

jaypers

If there is such a thing as the perfect day of the month for the direct debit the absolute most you could lose out on by having the worst day is about £1.72 in interest over the year! Not worth thinking about!! 

surreysaver

jaypers said:

If there is such a thing as the perfect day of the month for the direct debit the absolute most you could lose out on by having the worst day is about £1.72 in interest over the year! Not worth thinking about!! 

Standing order. Not direct debit. They're two different things 

allegro120

ThePirates said:

Once my FD Saver matures is there a 'best date' to restart, I've heard some people say the 1st, others the 3rd. Are we 'just' talking a few pence on interest over the year?

Yes, very small amount.  I open it as soon as it becomes available to open.  I prefer to just let it flow.  My maturity day goes up on average 3 digits every year. I don't think it is worth trying to break the pattern for a few extra pennies, not for me.  The other reason for not delaying openings is that the interest is fixed and in the current climate the rates are on decline (i.e. there is always a chance that FD will lower the rate for new applications whilst you are in waiting).

FIREmenow

AmityNeon said:

ThePirates said:

Once my FD Saver matures is there a 'best date' to restart, I've heard some people say the 1st, others the 3rd. Are we 'just' talking a few pence on interest over the year?

You could perhaps ensure the date of maturity falls on a weekday, or at least not at the beginning of an extended weekend. My last FD RS matured on Saturday (30th Dec) with the new one opened the next day (Sunday), but I did have an existing standard saver open and I monitored the visibility of my accounts, applying for the new RS when the maturing RS disappeared from my account list (but before receiving the matured balance).

zagfles said:

I can't see the date of the month making any difference anyway, except perhaps the 31st, not sure how they handle the SOs then, whether shorter months they take the SO on the 30th/28th?

The date of the standing order remains unchanged but shorter months lacking said date will not include a payment, and instead, subsequent months will include two payments. (Incidentally, this also contravenes the terms under 'Paying in by standing order' but obviously, nothing happens.)

FD have a handy standing order frequency option of last working day which I haven't seen many places, which can help in some of these situations. I'm also paid on the last working day so it's handy to send money off to the right places ready for the new month. 

For the RS, I reckon just get it open and at most check if the anniversary is a working day as mentioned.