Optimum number of Regular Savings accounts

flaneurs_lobster

I'm funding 22 RSs at the moment, all paying above 5.5%, at a monthly cost of £4800. Most of this comes from maturing RS, with extra coming from income and EA savers. These numbers vary each month as accounts mature and new ones are funded. There's another dozen or so at 5.5% or less that are just being ignored for present (I've run out of monthly funds).

The funding is all done manually, mostly around 1st of month, probably takes 2-3 hours and is mostly done via phone apps.

Recon to make around £4K/year just from RS interest, of course this has been an exceptional couple of years and these rates are unlikely to be seen for some time.

Rich1976

I suppose it would depend on how much spare cash someone has that they can lock away for a year without needing access to it. Most people I would assume would prioritise instant access because they don’t have enough saved up for emergencies.
others may be able to afford £100 a month, where as other people could have a couple of grand spare a month

friolento

Quite a few RS accounts are easy access, or can be closed early.

littlemissbossy

Thanks for asking OP, really interesting to read everyone’s strategies. 

[Deleted User]

friolento said:

Quite a few RS accounts are easy access, or can be closed early.

Precisely. With most EA now between 4.5% and 5% (I have Skipton at 5.25% till Jan, Chip at 4.75% and Chase which will no doubt drop from 4.75% very soon) it stands to reason the RS accounts which allow free withdrawals are gold dust.

Co op, Nat West, RBS, Nationwide and Newcastle BS are ones off the top of my head which allow withdrawals but there are no doubt more.

Great avenues into both RS AND easy access.

Nebulous2

Rich1976 said:

I suppose it would depend on how much spare cash someone has that they can lock away for a year without needing access to it. Most people I would assume would prioritise instant access because they don’t have enough saved up for emergencies.
others may be able to afford £100 a month, where as other people could have a couple of grand spare a month

I don't have spare income, I spend slightly more than I take in, but I had expected and had budgeted to spend quite a bit more, through until state pension age. My expenditure is lumpy. I bring in considerably more than I need to fund my basic needs on a daily / monthly basis, but on an annual basis I'll spend some big lumps - new bathroom, holiday, new vehicle etc. 

If timing is right then having regular savers helps to smooth that cashflow. I had a Regular saver mature just as we were going on a long-haul holiday, and it covered most of our expenditure, for example. 

If timing is wrong many of them allow withdrawals without penalty, and I have occasionally used that facility. Nationwide has an odd start to save account, which only allows you to pay in £50 a month over two years but allows three withdrawals over the piece. I've twice taken money from it. 

So they get me a bit more interest than instant access does, and while not as flexible as instant access, they help more than they hinder my cashflow problems. 

ShinyStarlight1

Thanks everyone for your insights. Helps me understand why they’re worth it.

MiserlyMartin

If interest rates keep falling then, we won't go over the tax free allowance so it will make sense to have more of them. This will depend on if the Bank of England have really killed off inflation. That is debatable. The bond market says they haven't.

Sarahspangles

ShinyStarlight1 said:

Is there an ideal number of Regular Saver accounts to have?

I have just opened two and the interest gained will be relatively small. This got me wondering whether there is a particular number of Regular Savers below which it isn’t really worth it.

We have twelve between us, we might hit fifteen based on current plans.

It has to be worthwhile financially, but also in relation to our time. We normally check once a month if there any new accounts that beat the rate of other limited access savings. We ignore any accounts that can’t be opened online. We also check if there are any loyalty offers from existing providers, we have a couple of accounts that pay good interest on a small ‘rainy day’ sum.

Working down the best buy tables, we stop if the extra interest would be less than 0.25% or something like that. Especially if it would involve setting up a new app!

surreysaver

Just counted mine and I've got 41 regular savers on the go