Regular Saver strategy - maximising returns and reinvestment

WindfallWendy

Since I'm a newby to this money lark, I wanted to test my developing theory/plan with others more experienced as well as park the theory/plan for other newbies to consider, as they embark on their own MSE journeys.

My plan here is all about making best use of the regular savers out there which encourage monthly savings up to a maximum of £200-300/month with tasty fixed rates matching or above the base rate.

I've currently got 6 of these, making use of £20k that I can't put into and ISA having maxed that out already this year.
Given I'm new to this, £20k sits in a good interest easy access account (currently get 4%). And each saver has a standing order from this account going into it.
Some of the regular savings are set up by virtue of having a current account with the bank (Lloyds, Halifax, Nationwide) so just out of paranoia, I pop the standing order into the current account and transfer into savings from the associated current account.
Monthly payments go into Regular Savings accounts on the first of the month, to maximise daily interest calculations.
Whilst most are 12 month savers, they seem to mature on the anniversary of opening so if you open an account on 15th of the month, you can wangle 13 payments into it given the restriction is on calendar month payments.

When they mature.... This is my current unknown, but I guess the ideal is that you have a portfolio of regular savers, with one maturing each month, and then the (say) £3k maturity cash just gets immediately spread out into other regular savers. 
And therefore the £20k I currently have in a reasonable rate easy access account, ends up dispersed across regular savers and I just work through each to manage monthly payments rather than a nice easy standing order arrangement.
Sounds like hassle, but my reckoning is that a bit of jiggery pokery will (eventually) offer around £75-100 a month, which alongside £200-400 /year of current account incentive switches, is a nice little inexpensive hobby to have. 

So that's what I'm working towards, but greedy old me has just set up 6 in the space of 2 months so I'm no where near that plan yet 😄

Does this sound sensible? Is this how others do it? Are there other tips and tricks I've missed? 

[Deleted User]

There are a couple of people on here at least who have maybe 40+ regular savers which is amazing to say the least but also very sensible.

Even allowing for tax free money, if you can earn 8% or 10% on smaller figures its surely better, even more so if you can still fill your ISA allowance over the tax year.

Ideally yes, you will have at least one RS maturing every single month but that is mostly dependent on how many you have in total (I have around 15?) but also the opening dates, for instance I had 3 mature in Sept but none now till next month, one in Dec but then maybe only one more till Spring.

And yes still put some more away in EA accounts if you can. I get months where dipping into my other savings is necessary to do all this (don't have huge amounts coming in which is why I try to maximise these) so having an EA account constantly earning 4/5% is a no brainer (some are double that so of course they stay maxed out)*

I don't do standing orders unless I have to but thats because I do have to juggle the money around more than some, the exceptions are FD, RBS, HSBC and Santander I believe who all have to be paid this way via their current accounts.

For the rest I naturally prioritise the likes of Virgin, Principality, YBS, Co op, the highest rates coming first.

I do as many on the first working day of the month as I can then do the rest as and when in order of interest rate, most months I do the lot within the first week or so.

Certainly not taking money out of my Virgin* or Santander high interest savers to pay a 6% RS so you do have to cut your cloth at times.

I'm pretty much out of options for switching, done so many over the last year or 2, the RBS triumverate was unbelievable for example, Virgin was the most recent, no cash offer as such, just great savings rates.

There are others much more experienced at this than me and with far higher savings being drip fed every month so I don't know if there are any tricks as such, but gradually you do find the maturing accounts all start to pay for your next month or two's RS figures, it works very nicely.

t1redmonkey

It sounds like you have the general idea of it.  Some things I would point out:

You are talking about maximising returns, but you also say you have a easy access account earning 4%.  You can earn much more than that currently if you look around, so you're not maximising your easy access rate from your starting position.

You also made reference to regular savers with 'fixed' interest rates.  I would say do not disregard ones that have variable rates of interest, as quite often, those will stay at or near that rate for the duration of the term.

The whole 'one maturing per month' idea is great, but I've been doing regular savers for some years and do not follow that.  Again, it's great if it happens like that, but I always go by the mantra of applying when one becomes available with a good rate, simply because it's impossible to know how long it's going to be around for (most of the time anyway, some rare occasions they announce in advance when they're withdrawing it).

poolboy

I have c25 regular savers and reckon every month 1 expires so I m recycling my cash.  The whole pot is generating 6% return which I am more than happy with.  Best tip is keep a relationship with all the providers, then when a new one comes along you are good to go.  They also disappear pretty quickly so don't sit around. 

Bigwheels1111

4% easy access is crap.

If you do not have an isa opened this year, a Chip easy access isa is not to bad 4.84%.

Access to fund or withdraw in less than 60 seconds.

https://moneyfactscompare.co.uk/isa/easy-access-cash-isas/

Others above are higher, but not used them so don't know how lond debits or credits take.

Easy access rates, Some rates drop after 3 withdrawls etc.

https://moneyfactscompare.co.uk/savings-accounts/easy-access-savings-accounts/

I keep the cash in Chip's isa, then fund 16 regular savers on the first of the month, 8th & 27th.

wmb194

Don't bank on the current account switching incentives to go on every year. These days most have a, 'if you've received an incentive in the past you cannot have another' type clause.

WindfallWendy

Ooo, wow, lovely Topper Tips on my Top Tips!!
I hadn't really thought about the value of having a relationship with a bank/building society as being so valuable, but yes of course that does make sense. 

I have ISA'd out for the year so can't make use of an easy access ISA. My bigger plan is to shovel £20k into a Stocks and Shares each year for another couple of years, whilst I play regular saver games. And then our fixed rate mortgage (currently <1%) runs out in Nov 2026 so I'll assess where I am then before I move into phase 2 of my MSE journey (paying off the mortgage!).

Right, I won't stop opening regular savers then and might reach into as many organisations as I can then! I was a bit nervous that Big Brother might investigate me for something but I'm not doing anything wrong so I'm going to stop worrying about that. 

Any more tips always welcome!!

friolento

WindfallWendy said:

Ooo, wow, lovely Topper Tips on my Top Tips!!
I hadn't really thought about the value of having a relationship with a bank/building society as being so valuable, but yes of course that does make sense. 

I have ISA'd out for the year so can't make use of an easy access ISA. My bigger plan is to shovel £20k into a Stocks and Shares each year for another couple of years, whilst I play regular saver games. And then our fixed rate mortgage (currently <1%) runs out in Nov 2026 so I'll assess where I am then before I move into phase 2 of my MSE journey (paying off the mortgage!).

Right, I won't stop opening regular savers then and might reach into as many organisations as I can then! I was a bit nervous that Big Brother might investigate me for something but I'm not doing anything wrong so I'm going to stop worrying about that. 

Any more tips always welcome!!

If you might want to use the money to pay off your mortgage in Nov 2026, don't put it into an S&S ISA. You want a 5+ years horizon for any investments. Best stick to cash for anything below 5 years.

WindfallWendy

friolento said:

WindfallWendy said:

Ooo, wow, lovely Topper Tips on my Top Tips!!
I hadn't really thought about the value of having a relationship with a bank/building society as being so valuable, but yes of course that does make sense. 

I have ISA'd out for the year so can't make use of an easy access ISA. My bigger plan is to shovel £20k into a Stocks and Shares each year for another couple of years, whilst I play regular saver games. And then our fixed rate mortgage (currently <1%) runs out in Nov 2026 so I'll assess where I am then before I move into phase 2 of my MSE journey (paying off the mortgage!).

Right, I won't stop opening regular savers then and might reach into as many organisations as I can then! I was a bit nervous that Big Brother might investigate me for something but I'm not doing anything wrong so I'm going to stop worrying about that. 

Any more tips always welcome!!

If you might want to use the money to pay off your mortgage in Nov 2026, don't put it into an S&S ISA. You want a 5+ years horizon for any investments. Best stick to cash for anything below 5 years.

Why is that? Because of the risk that it might not be worth £80k in a shorter window? 

friolento

WindfallWendy said:

friolento said:

WindfallWendy said:

Ooo, wow, lovely Topper Tips on my Top Tips!!
I hadn't really thought about the value of having a relationship with a bank/building society as being so valuable, but yes of course that does make sense. 

I have ISA'd out for the year so can't make use of an easy access ISA. My bigger plan is to shovel £20k into a Stocks and Shares each year for another couple of years, whilst I play regular saver games. And then our fixed rate mortgage (currently <1%) runs out in Nov 2026 so I'll assess where I am then before I move into phase 2 of my MSE journey (paying off the mortgage!).

Right, I won't stop opening regular savers then and might reach into as many organisations as I can then! I was a bit nervous that Big Brother might investigate me for something but I'm not doing anything wrong so I'm going to stop worrying about that. 

Any more tips always welcome!!

If you might want to use the money to pay off your mortgage in Nov 2026, don't put it into an S&S ISA. You want a 5+ years horizon for any investments. Best stick to cash for anything below 5 years.

Why is that? Because of the risk that it might not be worth £80k in a shorter window? 

Yes, there might be a dip just when you need to sell. There might not be, but better safe than sorry. Current interest rates are still not too far off the average returns on a balanced portfolio, anyway.

Eco_Miser

WindfallWendy said:

When they mature.... This is my current unknown, but I guess the ideal is that you have a portfolio of regular savers, with one maturing each month, and then the (say) £3k maturity cash just gets immediately spread out into other regular savers. 
And therefore the £20k I currently have in a reasonable rate easy access account, ends up dispersed across regular savers and I just work through each to manage monthly payments rather than a nice easy standing order arrangement.

As already mentioned, one maturing each month would be nice, but grabbing good rates as they become available is more important, which tends to lead to 'clumping'.

I always move the maturity proceeds (apart from the bit funding the first payment of the replacement RS) back to the Easy Saver where the monthly funding starts, that way there is a nice easy standing order arrangement, irrespective of which, if any, RS matured this month. Anyway, if you are saving from income, having a maturing RS is a signal to either open an additional RS, or a Fixed Term account, to soak up the money you've saved over the past year.

Different banks and Building Societies have different maturity procedures, which mean some maturing funds are not available until a day or two later than you expect, and sometimes you can't open a new RS until the day after that. Read the maturity notifications carefully.