The Top Regular Savers Discussion Thread

Bobblehat

snow62 said:

Bobblehat said:

Have you taken into account that the RS maturing near the end of a month may be used to.... a) fund other RS's a day or so later in the next month, which could/should pay more than any EA holding account ... b) or fund a new RS at the end of the next month on from when the maturing RS matured (e.g. RS matures at end of July funds 1st payment of new RS at end of August and 2nd at beginning of September)? .... c) a combination of a) and b)?

With 19 RS's, hopefully spread out over a decent period, I'm surprised that you are not already doing a) or b) or c)?
I'll admit that differences in timing will only create small advantages over figures quoted by the Banks/BS's expected interest figures, but those small advantages add up. After all, if you thought differently, why not leave the funds in an EA/FR/Notice Account rather than administer 19 RS's?

As for crystal ball gazing .... I work on the general principle that rising RS rates occur with rising EA rates, and falling EA rates occur when RS rates are falling! Once I've filled my ISA allowance for the year, I'm looking at which RS/EA/FR/Notice accounts have the highest interest rate and work my way down the list.

Ah, but my point is that funding initially at the end of the month instead of e.g. half-way through means that I would immediately be losing half a month at the higher rate.  RS matures in a year's time in the middle of the month, so that can be used to fund new RS half a month earlier which will earn more interest than initially funding on the 1st of a month.  Your b) just means you've missed out on a month of higher interest if you wait until the end of August; that's my take on it, anyway!

My 19 RSs aren't spread out evenly.  RS rates rose sharply around September 3 (?) years ago, which meant opening several in a short period.  That has followed on so I have 10 maturing Sept/Oct/Nov.  I've been using flexible cash ISA to fund and will replenish that as the RSs mature as well as opening new ones if the rates are worth it.

It's all swings and roundabouts.  What works for one person is not necessarily the same as what works for someone else.

Firstly, let me say I totally agree with your last paragraph  Each to their own method!

All I'm trying to show is that there are small advantages in doing the "fund at end of month strategy", and of course you might miss out if the RS is pulled before you bag it, as surreysaver points out. There's always another RS to open though if you miss one!

Have a look at this ... based on the MonBS RS and typical EA feeder account paying 4.5% .....



Provided I've done the calcs correctly, and ignoring that dates might fall at a weekend, irrespective of starting on the 1st or the 15th, you gain £6+ by funding on the 29th. Is it worth it ... that's up to you! If I were asked would you rather have £318.72 or £325.05, I know what I would answer!

You would gain a little more if you were allowed to fund a 13th payment (01/08), which some RS's allow. As I have mentioned in previous post, the 13th payment (not shown above) only provides a small gain to add on to the extra £6+  mentioned above, so is not a deal breaker for me, but I'll take it if offered.

What is fairly obvious is that there is a reasonably good gain over leaving the £6000 in the EA account.

For the curious, I did a second version of the chart altering it to move the payment dates on to the next working day if it fell at a weekend or Bank Holiday .... it lowered the advantage of starting on the 29th by 17p ... I won't bore everyone any further by attaching that chart!

If I've made any mistakes I'm sure there will be someone who will tell me 

Reg_Smeeton

Re:  Monmouthshire Exclusive RS issue 2 ( the 4.9% one)

I thought this account had no withdrawals before maturity but I can see online that I have the option to withdraw or transfer to my other MBS accounts. Is this due to the interest rate recently dropping or was I mistaken in my assumption? Just assessing my options as mine still has six weeks to run and could do with freeing up some money to fund more competitive RS’s at the moment

masonic

Bobblehat said:

If I've made any mistakes I'm sure there will be someone who will tell me   

You need to adjust the dates in the middle tables so after the first payment they fall on the 1st, like you have on the right.

This is nice, but it doesn't consider the scenario where you wait with money in the EA (ie what do you get between 1st-15th or 1st-29th at the start, and what do you get between 1st-29th and 15th-29th at the end, when there is no money in the RS). The interest will be equivalent when rates are static, but if you include one or two rate cuts over the year that would have an impact.

WillPS

With regards to the discussion about delaying funding... worth noting that every day 'sat out waiting' is a day of 6% missed. It's silly to expect that 6% rate to last more than a few months; last year's MonBS "exclusive" issue has fallen with every base rate reduction and normally by more than the base rate has fallen.

I suspect we're safe for the one in a couple of weeks but I don't reckon I'll have much left in there by the end of the year.

Bobblehat

masonic said:

Bobblehat said:

If I've made any mistakes I'm sure there will be someone who will tell me   

You need to adjust the dates in the middle tables so after the first payment they fall on the 1st, like you have on the right.

This is nice, but it doesn't consider the scenario where you wait with money in the EA (ie what do you get between 1st-15th or 1st-29th at the start, and what do you get between 1st-29th and 15th-29th at the end, when there is no money in the RS). The interest will be equivalent when rates are static, but if you include one or two rate cuts over the year that would have an impact.

I had thought of that scenario, but didn't want to try to squeeze too much into what is essentially a very hypothetical comparison that could bore the pants off everyone!

As to the rest of your post .... yep, hopefully I've given those inclined to delve into the fine detail an idea of what they could do to improve their own version of the chart and get more accurate figures based on their starting points and guestimates of rate changes.

Kim_13

Reg_Smeeton said:

Re:  Monmouthshire Exclusive RS issue 2 ( the 4.9% one)

I thought this account had no withdrawals before maturity but I can see online that I have the option to withdraw or transfer to my other MBS accounts. Is this due to the interest rate recently dropping or was I mistaken in my assumption? Just assessing my options as mine still has six weeks to run and could do with freeing up some money to fund more competitive RS’s at the moment

If I recall correctly, some forumites attempted to withdraw but received a secure message back that their request couldn’t be carried out as the account didn’t allow withdrawals. They could only request closure via submitting a withdrawal request for the full balance.

Bobblehat

WillPS said:

With regards to the discussion about delaying funding... worth noting that every day 'sat out waiting' is a day of 6% missed. It's silly to expect that 6% rate to last more than a few months; last year's MonBS "exclusive" issue has fallen with every base rate reduction and normally by more than the base rate has fallen.

I suspect we're safe for the one in a couple of weeks but I don't reckon I'll have much left in there by the end of the year.

Agree, but it's likely the EA rate I used as an example would also fall in proportion to the RS rate. If the chart was adjusted accordingly, it would just show a reducing advantage but unlikely to show a negative one! Most forumites on here would know when to stop funding the RS before it got to that point!

The "sat out waiting" assumes you have the funds to go straight away! As mentioned above, I'm trying to show some what if's ... not all what if's!

Kim_13

I suspect the biggest advantage in sitting out waiting is when you don’t have £500 now, but will in August. Risk free with Monmouthshire if you’ve already applied, unless it turns out accounts opened via app start on the day of application. If you wait, you can still hit the maximum balance. Though that being said they would allow a 13th payment taking the balance up to £6,000, you’d just have less interest than someone who had the full £6,000 earning interest for a month+ before the account matured.

Chaykin

New to Monmouthshire BS. Went with opening via app - first an Instant Saver I4 (about 7-8 minutes waiting at the "processing" screen) and then subsequently applied for the Regular Saver I8. (this time processing took only about 3 minutes) Both now showing on the app. I will fund the RS early next week.

Agree the 2x SMS codes is annoying. How come the e-mail code button works after 1x press?

As per @10_66 post earlier on - I tried turning off bio-metric login (i.e. change to PIN) but that didn't help and still requires 2x button presses for SMS code = 2x OTPs. So it didn't work for me.

Anybody knows if I will also be provided (via post?) with login details for their online portal?

WillPS

Bobblehat said:

WillPS said:

With regards to the discussion about delaying funding... worth noting that every day 'sat out waiting' is a day of 6% missed. It's silly to expect that 6% rate to last more than a few months; last year's MonBS "exclusive" issue has fallen with every base rate reduction and normally by more than the base rate has fallen.

I suspect we're safe for the one in a couple of weeks but I don't reckon I'll have much left in there by the end of the year.

Agree, but it's likely the EA rate I used as an example would also fall in proportion to the RS rate. If the chart was adjusted accordingly, it would just show a reducing advantage but unlikely to show a negative one! Most forumites on here would know when to stop funding the RS before it got to that point!

The "sat out waiting" assumes you have the funds to go straight away! As mentioned above, I'm trying to show some what if's ... not all what if's!

It's very situation dependent.

One of the factors is the amount of money one has to invest. If you have enough that investing at 6% is only just worthwhile given the accounts you already have and are available, a rate drop is more likely to make the account not worthwhile for you compared to someone with enough money to fund every regular saver going if they chose to. This is obviously hugely variable person to person.

Another factor, since this is a variable rate, is how fast MonBS drop relative competitors. Last year's account most definitely outpaced both the market and the base rate in terms of how quickly it fell. So far, in fact, that it barely edges out easy access rates now!

I don't doubt there are some forumites for whom 4.9% is still the best that particular chunk of money could do but surely most have emptied their accounts by now? In which case the 'end of the month arbitrage' is negated by the amount of days they didn't get the best rate for.

MonBS could surprise us and leave the rate alone, and that'd be a pleasant surprise - but I think it's sensible to manage expectations such that we expect that it will fall.