Easy access & regular savings - working out the maths

martyp

Hi all,

Please can someone help work out what is the best arrangement for best result.

For the last 12 months I paid £200 a month into a regular saver at 8% interest.
That money came from an easy access savings account at 4.65%

I worked out there would be about £84 interest from the 8% account but leaving it in the 4.65% easy access works out over £100.

So the 8% seems attractive but as it is smaller amounts going in gaining interest it seems better to just leave the money in the easy access account for the year?

I appreciate it's not a huge amount being saved but thinking the aim of a regular saver is just better compared to a current account paying no interest as such.

Many thanks

friolento

The MSE calculatorr should give you your answer  https://www.moneysavingexpert.com/savings/regular-savings-calculator

Sarahspangles

Don’t forget you also get interest on the money not yet moved from the 4.65% account.

Say you start the year with £2,400 in the 4.65% account and by the end of the year you have £2,400 in the 8% account.

On average over the year, you had £1,200 in each account. You get £55.80 interest on the 4.65% account and £96 on the 8% one.

Mark_d

I completely agree.  Regular saver account have attractive interest rates but the amount of interest you earn is small.

Personally I've given up on savings accounts. I'd earn very little extra compare to keeping all my cash in my Kroo current account (4%)

martyp

friolento said:

The MSE calculatorr should give you your answer  https://www.moneysavingexpert.com/savings/regular-savings-calculator

Thanks, I did try that and it came back with £103 for the regular but can't see a comparison with leaving the money in the easy access for a year.

martyp

Sarahspangles said:

Don’t forget you also get interest on the money not yet moved from the 4.65% account.

Say you start the year with £2,400 in the 4.65% account and by the end of the year you have £2,400 in the 8% account.

On average over the year, you had £1,200 in each account. You get £55.80 interest on the 4.65% account and £96 on the 8% one.

Thankyou, that makes sense. Just a case of figuring out how much more the interest is in the regular saver than the easy access to see enough benefit to move it as such. If it is the case that anything higher for the regular means more interest then that's easy to work with.

Sarahspangles

martyp said:

friolento said:

The MSE calculatorr should give you your answer  https://www.moneysavingexpert.com/savings/regular-savings-calculator

Thanks, I did try that and it came back with £103 for the regular but can't see a comparison with leaving the money in the easy access for a year.

You just work out 4.65% on the amount in the regular saver.

eg 2400 x 0.0465

martyp

Using the calculator for easy access here https://www.bankofengland.co.uk/education/education-resources/borrowing-savings-calculator

It suggests £111.30 with £2400 in there at 4.65%
So based on the average of £1200 in both accounts then you'd be talking about £40 more at the end of the year by moving £200 a month into the higher 8% account.

I think it's just the case that the calculators just show what you get on that account and not the combination from drip feeding from an easy access into a monthly saver.

martyp

Mark_d said:

I completely agree.  Regular saver account have attractive interest rates but the amount of interest you earn is small.

Personally I've given up on savings accounts. I'd earn very little extra compare to keeping all my cash in my Kroo current account (4%)

Thanks yes, I've still been using my Tandem account as it's only dropped to 4.65%
I have a Natwest 6.17% regular as well and the Cahoot 5.08% easy access.

I considered the 5.01% chip offer but that is a tracker and suggests it'll drop the day the BoE base rate changes which I suspect we might be in line for. 

I just wasn't sure whether to bother with the 6.5% £200 Nationwide regular saver or leave the £2400 in the 4.65% Tandem account for the year. Sounds like the Nationwide drip feed would pay off to have.

Sarahspangles

Between us we have £1750 a month going into regular savers, ranging from 5.25 % to 8 %. That’s not a huge margin over single-access savers at 4.5 % to 4.65 %. It amounts to an additional £200ish a year.

I used to question if it’s worth the effort but we both qualified for the Nationwide ‘Fairer Share’ £100 this year, and Loyalty ISAs with other providers where an extra 0.5% on over £20k is worth having.

simonsmithsays

Mark_d said:

I completely agree.  Regular saver account have attractive interest rates but the amount of interest you earn is small.

Personally I've given up on savings accounts. I'd earn very little extra compare to keeping all my cash in my Kroo current account (4%)

Maybe you've had a rethink regarding RS after it was pointed out, to you, in another thread that lots of run with lots of them and it's not a either / or?

Not a dig btw this forum is fantastic for learning off others.

I've certainly been very grateful of advice in the past and hopefully the future too.