Regular savings account verses standard savings account

allegro120

Cobbler_tone said:

allegro120 said:

Bobblehat said:

Cobbler_tone said:

Thanks all.
£145 interest over 12 months on £300 per month on 7.5% (using the calculator)
Is it £58 difference (in interest) compared to £6,000 to £9,600 on 4.5% across 12 months, as alluded earlier?

If so I'd weigh up the admin of having one/multiple regular saving accounts.

At least you now have an accurate means of calculating whether an account is worth it to you or not   

Quite a few on here with multiple RS accounts will have a cut-off point for the interest rate ... e.g. nothing below 6%, others might go lower. It goes without saying that any new RS with a really good interest rate are snapped up quickly ( e.g. Virgin at 10% - NLA). Where it really starts to make a reasonable difference is when you have a few of the RS accounts and you are putting away (or recycling) a total of £1000 plus each month. I think I remember one member mentioning £7000+ each month! No doubt that is recycling at the extreme, where a couple of RS's mature every month and pays for the next monthly contributions to all the active RS's.

I find a dozen RS's easy enough to manage with standing orders doing the bulk of the work. 

My total deposit into regular savers this month was £9400, it does make a significant difference.  I don't see it as an extreme, rather a sensible method to maximise the interest
It might look like a lot of work, but when you are doing it for many years and have your admin system in place it doesn't feel like hard work. 

I'm genuinely made up and love a day that I learn something to challenge a mis-understanding. I'm decent on pensions, industrial relations and many other areas, clearly not on savings percentages. Slightly embarrassed as I am strong on maths...usually!

Using the ML calculator the difference between 4.5%-7.5% on a £6k head start (at £300 diverted per month) is £60 a year in favour of the 7.5%. A bit more in the pocket, a bit more for the HMRC!
I guess you may not be averaging 7.5% but at your levels that could be worth £1,800+ a year.

I'll do the Zopa 7.5% as no restrictions (other than paying in) and I can open with a couple of clicks.
 

It would be too much of a task for me to calculate the annual gain.  My regular savers' rates range between 5.25% and 10.38%, monthly allowances between £50 and £1000, regular savers come and go throughout the year and feeder easy access accounts' rates are constantly changing. At the moment my feeder account pays 5.12%, not long ago it was 5.2%, from mid January it will be below 5%, so I guess the gain for this financial year will be less than £1.8k, but every little helps.

I wasn't invited to Zopa's offer yet.  If I ever get an invitation I will open the account without delay

friolento

allegro120 said:

I wasn't invited to Zopa's offer yet.  If I ever get an invitation I will open the account without delay

Have you put yourself on the waitlist? I got an invite about 10 days after I registered. May have been coincidence, I don't know, worth a try.

allegro120

friolento said:

allegro120 said:

I wasn't invited to Zopa's offer yet.  If I ever get an invitation I will open the account without delay

Have you put yourself on the waitlist? I got an invite about 10 days after I registered. May have been coincidence, I don't know, worth a try.

Yes, I did a few days ago, I hope I'll get one soon:) 

Archerychick

allegro120 said:

friolento said:

allegro120 said:

I wasn't invited to Zopa's offer yet.  If I ever get an invitation I will open the account without delay

Have you put yourself on the waitlist? I got an invite about 10 days after I registered. May have been coincidence, I don't know, worth a try.

Yes, I did a few days ago, I hope I'll get one soon:) 

I joined the wait list last week and got an in app invite today - hopefully you don’t need to wait much longer!

allegro120

Archerychick said:

allegro120 said:

friolento said:

allegro120 said:

I wasn't invited to Zopa's offer yet.  If I ever get an invitation I will open the account without delay

Have you put yourself on the waitlist? I got an invite about 10 days after I registered. May have been coincidence, I don't know, worth a try.

Yes, I did a few days ago, I hope I'll get one soon:) 

I joined the wait list last week and got an in app invite today - hopefully you don’t need to wait much longer!

Just checked my Zopa e-mails, I've joined the waiting list 15 days ago.  May be they give a priority for those who have some money in their accounts, my Smart Saver (the only account I had with Zopa MKII) stood empty since April 2023???    

35har1old

Cobbler_tone said:

Just putting this out there. I am sure there are some very savvy people on here but some may be drawn in by the high rates that are always around on regular savings accounts.

I always have a sniff around but when you model the impact, if you have any savings of a modest level I've never found one that works out favorably. I don't chase pennies, so not bouncing around every 5 mins to the latest offer.

I looked at Zopa (only because I have an ISA with them and it popped up on my app) offering 7.5% on up to £300 per month.
Comparing to starting with £6k elsewhere on a boosted Chase 4.5% rate. The impact of putting £1k a month to this, or £700 to it and £300 a month to the 7.5% account left you worse off after 12 months.

I know all situations/numbers are different but ultimately the emotional lure of these rates can override the maths.

I can only think these rates only ever really work for those starting out on their savings journey, where they are a great product.

The Chase rate will drop in January to 3.5%

allegro120

35har1old said:

Cobbler_tone said:

Just putting this out there. I am sure there are some very savvy people on here but some may be drawn in by the high rates that are always around on regular savings accounts.

I always have a sniff around but when you model the impact, if you have any savings of a modest level I've never found one that works out favorably. I don't chase pennies, so not bouncing around every 5 mins to the latest offer.

I looked at Zopa (only because I have an ISA with them and it popped up on my app) offering 7.5% on up to £300 per month.
Comparing to starting with £6k elsewhere on a boosted Chase 4.5% rate. The impact of putting £1k a month to this, or £700 to it and £300 a month to the 7.5% account left you worse off after 12 months.

I know all situations/numbers are different but ultimately the emotional lure of these rates can override the maths.

I can only think these rates only ever really work for those starting out on their savings journey, where they are a great product.

The Chase rate will drop in January to 3.5%

Yes, the 1% boost is until 16 Jan 2025.  4.5% is a poor rate as we speak.  Chase savings account was great then they offered a revolutionary 1.5% leaving all other EA providers far behind.  As soon as they got enough custom they disengaged from the race.  The best thing they have is 1% cash back on card purchases, I've never stopped using my Chase card since it was launched.  

Cobbler_tone

I’ve been with Chase since their launch. I like them (£420 cashback) but had issues receiving some payments such as CHAPS, so have to use a different account.
I’ll be on the hunt for a keener rate in Jan when the 1% boost ends but might not be too much about and only tend to move if there is something significantly better.
ISA with Zopa who had a good rate at the time. Not as keen on their app.

allegro120

Cobbler_tone said:

I’ve been with Chase since their launch. I like them (£420 cashback) but had issues receiving some payments such as CHAPS, so have to use a different account.
I’ll be on the hunt for a keener rate in Jan when the 1% boost ends but might not be too much about and only tend to move if there is something significantly better.
ISA with Zopa who had a good rate at the time. Not as keen on their app.

We see savings rates on decline, but I think in 7 weeks time 3.5% will be far from competitive. I could be wrong, but it doesn't look like the decline is going to be as rapid as it was last time. "significantly better" is an abstract term, but something like 4.5% should still be available in mid January.  A better practice is to open the highest paying accounts earlier, before they are taken off the shelves, and move your money there when/if appropriate.

Zopa upgraded their app recently, I haven't explored the new version yet but I haven't had any problems with the original app.  I do like Chase app, probably because I use it a lot

Bridlington1

Cobbler_tone said:

allegro120 said:

Bobblehat said:

Cobbler_tone said:

Thanks all.
£145 interest over 12 months on £300 per month on 7.5% (using the calculator)
Is it £58 difference (in interest) compared to £6,000 to £9,600 on 4.5% across 12 months, as alluded earlier?

If so I'd weigh up the admin of having one/multiple regular saving accounts.

At least you now have an accurate means of calculating whether an account is worth it to you or not   

Quite a few on here with multiple RS accounts will have a cut-off point for the interest rate ... e.g. nothing below 6%, others might go lower. It goes without saying that any new RS with a really good interest rate are snapped up quickly ( e.g. Virgin at 10% - NLA). Where it really starts to make a reasonable difference is when you have a few of the RS accounts and you are putting away (or recycling) a total of £1000 plus each month. I think I remember one member mentioning £7000+ each month! No doubt that is recycling at the extreme, where a couple of RS's mature every month and pays for the next monthly contributions to all the active RS's.

I find a dozen RS's easy enough to manage with standing orders doing the bulk of the work. 

My total deposit into regular savers this month was £9400, it does make a significant difference.  I don't see it as an extreme, rather a sensible method to maximise the interest
It might look like a lot of work, but when you are doing it for many years and have your admin system in place it doesn't feel like hard work. 

I'm genuinely made up and love a day that I learn something to challenge a mis-understanding. I'm decent on pensions, industrial relations and many other areas, clearly not on savings percentages. Slightly embarrassed as I am strong on maths...usually!

Using the ML calculator the difference between 4.5%-7.5% on a £6k head start (at £300 diverted per month) is £60 a year in favour of the 7.5%. A bit more in the pocket, a bit more for the HMRC!
I guess you may not be averaging 7.5% but at your levels that could be worth £1,800+ a year.

I'll do the Zopa 7.5% as no restrictions (other than paying in) and I can open with a couple of clicks.
 

In addition opening new savings accounts is typically quicker as an existing customer than it is as a new customer.

When I opened my first account with Principality BS for example I had to give them various details, set up online banking etc. But as an existing customer opening a new regular saver can be done in under a minute as all I've got to do is go to the application form, log in to online banking and quickly confirm my details.

Moreover you get more efficient at the admin as time goes on. I've currently got over 50 regular savers (I don't fully fund all of them as many are kept open speculatively). The first day and first working day of the month are usually busy as most regular savers go on a calendar month basis so want feeding then but aside from that I don't have to do that much with the regular savers.

One thing to note that may save on your admin is that I archive regular saver Ts&Cs to the wayback machine and back them up on a OneDrive for future reference:
https://forums.moneysavingexpert.com/discussion/6470420/an-archived-list-of-regular-saver-terms-and-conditions/p1