Savings Accounts options to dripfeed into Regular Savers

Eco_Miser

Post 9 of Special_Saver2's Regular Savings Accounts: The Best Currently Available List! is 9. Best Feeder Accounts, intended for this purpose.

https://forums.moneysavingexpert.com/discussion/comment/76870806/#Comment_76870806

AyJaydee

brucefan_2 said:

AyJaydee said:

I maintain a spreadsheet where I list all the significant parameters of all the providers that I am looking at, for ISA's, Fixed, Regular Savers, Instant Access and Currents.  
(And yes, I got drip-feeding multiple regular savers down to a fine art)
Good hunting!

It would be interesting to know what your strategy/timings etc., are, if you have the time to post it please.

For anyone interested in knowing, this is what I do.  Feel free to copy and tailor to suit your needs.

Starting off saving up into my 20’s, I had just one Building Society instant access account and I soon learned that I could boost my savings by feeding some into a Regular Savings account each month. At the end of the year, I would move it all back and start again; knew nothing of Fixed Accounts, or looking somewhere else for better interest rates. Kept that up for years.

Now I run multiple accounts of each type, increasing as capacity allows and this is how I do it.

Start by creating a spreadsheet with the following column header names:

1. Provider name.

2. Product name.

3. Type – Fixed, RegSvr, InstAcc, ISA, Current.

4. Withdrawls permitted – Yes, No, how many per year.

5. Interest Rate.

6. Term – e.g. 12 month.

7. Limit – e.g. £100 per month.

8. Conditions.

9. Up to date sum contained.

10. Anniversary date.

11. Estimated Interest.

12. Interest Earned.

13. Tax.

Populate spreadsheet with details of accounts you look at, start with providers that you know, one product per row, does not need to be exhaustive. Only enter those that are of interest, don’t forget to include the ones that Martin recommends.

Now sort the entries in order of descending interest rate and use different colours to highlight those that you subscribe to, e.g. green for open, red for closed, yellow for considering and orange for about to mature. With things constantly changing, you need to monitor this regularly to ensure that the information is still correct and it seems that you need to check more often about BoE base rate change times. Make use of the AutoFilter feature in spreadsheets, to sift for whatever information you want to drill down into.

A note of explanation about the last three columns.

As you get interest added to an account, be sure to update the Interest Earned entry. This is so that you have an instant view of what you have earned in that tax year and know when your tax-free allowance threshold is reached.

Because there are accounts that pay interest at their end, the Estimated Interest column comes into play. Use the equations ‘=Interest Rate * Sum’ for lump sum accounts, ‘=Interest Rate * Monthly deposit * ((12+11+10+9+8+7+6+5+4+3+2+1)/12)’ for 1-year Regular Savers.

If you are going to go over your tax-free allowance threshold, you will want to know how much tax this will will likely be. Use the equation ‘=100 * Interest Rate * 0.2 (for 20% tax payers).

For the benefit of anyone who is not savings-savvy and not sure where to start:

What accounts you decide to have open, is a personal matter, but you should be aiming to have all your ‘green’ entries towards the top of the list wherever possible and be maxing-out on those accounts that pay you the most interest, although each person’s choices will be determined by personal circumstances.

Fixed accounts will generally give the best rate of return, so go for them if you have a lump sum that you know you won’t touch.

Regular savers give better return than Instant Access, so use these where you have a surplus each month (although I note that in yesterdays program, Martin commented on an exception to this rule)

Instant Access; since these (normally) give the lowest interest rates, aim to keep in these as little as you are comfortable with to meet your cashflow needs.

Fixed ISA’s typically offer less than other Fixed accounts, but they come into their own when your interest earned in the financial year is going to go over your Tax-Free threshold (for 20% tax payers, that’s £1000). So when you do go over this threshold and want to open a new account, take the tax rate into consideration.

Note, when comparing Regular Savings accounts with other types, you should halve the given interest rate because the terminal sum is building up across the term.

All this comes with the following caveat:   Use at your own responsibility.

surreysaver

Also, another thing Martin didn't mention yesterday when talking about using ISAs if you're going to be paying tax on your savings, is the difference between flexible and non-flexible ISAs, which is important if you're going to be using an ISA as an easy access account 

brucefan_2

@AyJaydee

Thankyou for taking the time and effort to do this.

It's always useful to learn from other well thought-out systems.

A simple thing, such as your colour -coding had never occurred to me. Having read it above, it's such an obvious thing to do.

Again, many thanks.

Eco_Miser

@AyJaydee There's a simple formula for the sum of an arithmetic series, such as your (12+11+10+9+8+7+6+5+4+3+2+1)It's (first + last) * count/2 . In this case (12+1)*12/2 so your whole expression reduces to

‘=Interest Rate * Monthly deposit * (13*12/2/12)', the 12's cancel leaving ‘=Interest Rate * 6.5* Monthly deposit'

And the tax is '=Interest * 0.2' where interest is either of columns 11 or 12 at your preference.