The Top Regular Savers Discussion Thread

35har1old

Bobblehat said:

Mon BS RS Iss 8

As a new customer to Mon BS, and not overly keen on "Apps" (prefer big screens and full size keyboards!), I used the online process to apply. I am not expecting to fund the RS, if I'm successful, until as late as possible in August, so any delay with providing wet signatures etc. is not an issue for me. If it costs me a stamp for lack of pre-paid return envelope, so be it, it won't make much of a dent in ~£215 interest (funding late Aug and as early as possible in subsequent months).

The only snag I came across while applying was ... at the end of page 2, it went back to page 1 and I was expecting an error message (as if I might have missed a mandatory field out). No error flagged on page 1 and onto page 2 again, with no error flagged there either. Everything went on OK from that point, so just the mystery revisiting to page 1 and 2 threw me slightly! Confirmation of application email arrived within 1 minute of completing, so now I'll just wait and see what happens next 

£215 maybe wishful thinking as issue 2 started at 6% and has dropped to 4.9% after 3 BOE rate drops each time they reduced it by more than 0.25%
Ist 0.45%  2nd 0.35 and the third 0.3%
The website at present giving closed accounts rates hasn't been updated and still shows a rate of 5.2% more than a month after the last decrease

allegro120

snow62 said:

Long time lurker with very few posts, but I've been playing the RS game for 10+ years, currently with 19 RS accounts.

I've never been convinced about the argument for waiting until the end of the month to open and make the initial payment to a new account.  I totally understand that this will maximise the interest on that account, but this is offset by the lower interest earned in a feeder account before opening as well not having an earlier opportunity to open a new account at maturity.  As an example, if I open and fund a new account in the middle of the month, I earn a higher rate for two weeks on that first deposit than if I wait.  In a year's time I either open a new account or I earn a further two weeks' interest on the accrued total.  Of course it can depend on each account's conditions, and a crystal ball is required to know what rates will be in a year's time, but my calculations don't indicate a benefit from waiting until the end of the month.

Re Monmouthshire, I've never had any problems with them.  Yes, their systems are fairly antiquated, and things might take a day or two longer than other institutions, but I'm quite happy to accept this if their rates make it worthwhile.  I've applied for the 6% online, and £500 monthly pay-in is a bonus - I'd have been fine with £300 as with previous accounts with them.

I'm worse - 20+ years and this month I funded 51 RS... 
It really depends on individual circumstances. I have enough in my EA accounts to do the same next month and this is the pattern I've always maintained.  In my situation there are no tangible benefits in delaying funding. 

35har1old

Bobblehat said:

s71hj said:

Re Monmouthshire presumably the best way to max out interest is to get a payment in this month then another 11 on the 1st of each month? 

That's what I'm hoping but one month later than you, as I applied online and don't expect the RS to open before 1st Aug. I'll try to make the 1st payment as late in Aug as possible and 2nd on 1st Sept. It should net ~£218 if rates don't drop and MonBS start the interest date as the day of the 1st deposit.

I'm assuming my application will be successful, of course! 

I would think the year will run from date of opening and not from first deposit 

Bridlington1

35har1old said:

Bobblehat said:

s71hj said:

Re Monmouthshire presumably the best way to max out interest is to get a payment in this month then another 11 on the 1st of each month? 

That's what I'm hoping but one month later than you, as I applied online and don't expect the RS to open before 1st Aug. I'll try to make the 1st payment as late in Aug as possible and 2nd on 1st Sept. It should net ~£218 if rates don't drop and MonBS start the interest date as the day of the 1st deposit.

I'm assuming my application will be successful, of course! 

I would think the year will run from date of opening and not from first deposit 

In the case of Monmouthshire, Gatehouse, Skipton, Co-op, possibly others that I can't think of off the top of my head the term begins from the date of first deposit rather than the date it was opened.

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.