The Top Regular Savers Discussion Thread

friolento

francoghezzi said:

SORRY, BUT ...
Hundreds of posts on Principality and then you do the math. 26 pounds interests in 6 months, that means 52 in a year opening again the same account. If I deposit the same amount of money in a Lloyds 6.25% (£400 every month for the first 3 months equal 1200) I got 70 pounds in interests at the end of the same year (£20 more than Principality) keeping 'invested' the same amount of money. So, what ? I will go for a 12 months Rs all my life, not to mention higher Rs paying more than Lloyds ...
Where and how am I wrong?

You aren't going wrong if you can only fund a 6.25% account, and also have enough to service all the higher paying accounts..Those that are able to fund all of these plus some lower ones aren't wrong either.

clairec666

masonic said:

clairec666 said:

masonic said:

francoghezzi said:

Bridlington1 said:

francoghezzi said:

CricketLady said:

Hello Francoghezzi,

No need to apologise and I'm sure lots more savvy members will have better answers but in my case, I don't pay tax on my hard earned cash as I'm taking a break from work so rather than have any of my cash sitting at 5% Cahoot I'd much rather have as many accounts paying 6% upwards no matter what the time frame.  If I could have another 6.25% regular saver with Lloyds I would, I'd have 5 if they'd let me, but they only let you have one.  And I have all of the others (I currently feed 52 with about £10k per month, a mix of new cash as my husband is a higher earner and recycled funds) but again, others on here will probably have more than 52!

Have a lovely day xx

But 1200 kept at 5% on Cahoot will give you more interests in a year than 2 Principality rs ... almost £10 more (it's £60 interest with Cahoot against £52 from Principality). Even deposited in a 5.25% Rs those money would earn more interests in 12 months time

But £1.2k kept at 5% in Cahoot for 6 months would earn less than £1.2k kept in Cahoot and drip-fed into 7.5% Principality RSs. 

That's for sure. But the big question remains. Why should I go for a 6 month Rs when any other 12 month Rs above 5.25% would give me more investing the same amount of money? (Unless, of course, I already own 100 fully funded Rs ...)

If you have a limited amount of money, such that you are unable to fund both a 6.25% Lloyds RS and a 7.5% Principality RS at the same time, so you put £200 in each for the first 6 months and then £400 in Lloyds (£200 per month fed from 5% Cahoot) and £200 in Principality for the second 6 months, then you will end up about the same total interest of ~£194. So nothing gained vs just funding the Lloyds RS from income. So if you need to prioritise RS, the 6 month account will be fairly low down the list, certainly after anything annual paying 6% and higher.

Just wondering how you managed to get £194?

By my calculations, £400 per month into Lloyds for 12 months will result in £162.50 interest - assuming this is from income each month, and no drip-feeding.
If however you distribute your income between Principality and Lloyds for 6 months (i.e. £200 each), then from month 7 onwards use Cahoot to drip-feed, you'll end up with £167.38 interest.

I agree with your idea, but when I crunch the numbers it comes out in favour of Principality.

I based my scenarios on opening the accounts on 30th September 2025 with the initial payment and adding on the 1st of each month after that. So there is £5,200 in the Lloyds account for the last month. I also assumed 2 days slippage after the first 6 month Principality term was over before interest started being earned in Cahoot. But I can see I had an off-by-one error that added a day to the term and closed the gap more than was fair (even then there was a small gap), so overall it should have been £191.95 for the multi-RS option and £186.71 for the single RS option, for a £5 difference. The actual breakeven is about 6.5%, so I think after taking some extra hassle into account prioritising annual accounts 6% and above still holds as a reasonable cut-off.

Ah, I hadn't factored in the old "fund on the 30th" trick. I was doing a fairly crude calculation of funding on the 1st each month, and each month being an equal length.

My calculations agree with the break-even point being 6.5%. There's still a lot that depends on personal circumstances though, like whether you're funding from savings or salary, and whether you have spare capacity in your existing regular savers. And everyone's got different ideas on how much "extra hassle" is worth it.

Eco_Miser

francoghezzi said:

Bridlington1 said:

francoghezzi said:

CricketLady said:

Hello Francoghezzi,

No need to apologise and I'm sure lots more savvy members will have better answers but in my case, I don't pay tax on my hard earned cash as I'm taking a break from work so rather than have any of my cash sitting at 5% Cahoot I'd much rather have as many accounts paying 6% upwards no matter what the time frame.  If I could have another 6.25% regular saver with Lloyds I would, I'd have 5 if they'd let me, but they only let you have one.  And I have all of the others (I currently feed 52 with about £10k per month, a mix of new cash as my husband is a higher earner and recycled funds) but again, others on here will probably have more than 52!

Have a lovely day xx

But 1200 kept at 5% on Cahoot will give you more interests in a year than 2 Principality rs ... almost £10 more (it's £60 interest with Cahoot against £52 from Principality). Even deposited in a 5.25% Rs those money would earn more interests in 12 months time

But £1.2k kept at 5% in Cahoot for 6 months would earn less than £1.2k kept in Cahoot and drip-fed into 7.5% Principality RSs. 

That's for sure. But the big question remains. Why should I go for a 6 month Rs when any other 12 month Rs above 5.25% would give me more investing the same amount of money? (Unless, of course, I already own 100 fully funded Rs ...)

In my world Principality 7.5% has the same appeal of TSB or Hsbc 5%. No more than that because Maths is not an opinion

But you're NOT investing the same amount of money for the same time. Two consecutive  6 month accounts use only half the money*time a 12 month account does. So you can put the extra in an easy access account, or spread it over multiple RSs  

Scenario 1 - pay £200 a month into a 6 month RS@ 7.5% result £26.25 interest. Repeat for months 7-12, with the excess in an EA @4%, resulting in total interest of £62.50

Scenario 2 - pay £200 a month into a 12 month RS@ 5.5% for 6 months, then leave the £1200 result £52.50 interest.

Scenario 3 - like scenario 2 but @6.53%, result interest of £62.50.

month	6m RS	EA	12m RS
1	200		200
2	400		400
3	600		600
4	800		800
5	1000		1000
6	1200		1200
7	200	1000	1200
8	400	800	1200
9	600	600	1200
10	800	400	1200
11	1000	200	1200
12	1200	0	1200
£months	8400	3000	11400
rate	7.50%	4%	5.50%
£ interest	52.5	10.00	52.25

Scenario 4 - Feeding £200 a month for the full 12 months @5.5% gives £71.50 interest, but uses £2400 by the last month.

Scenario 5 - Repeating scenario 1, but also feeding £200 into another 6 month RS, matching the payments in scenario 4, gives £115.

So it really depends on what actual rates are available.

francoghezzi

Eco_Miser said:

francoghezzi said:

Bridlington1 said:

francoghezzi said:

CricketLady said:

Hello Francoghezzi,

No need to apologise and I'm sure lots more savvy members will have better answers but in my case, I don't pay tax on my hard earned cash as I'm taking a break from work so rather than have any of my cash sitting at 5% Cahoot I'd much rather have as many accounts paying 6% upwards no matter what the time frame.  If I could have another 6.25% regular saver with Lloyds I would, I'd have 5 if they'd let me, but they only let you have one.  And I have all of the others (I currently feed 52 with about £10k per month, a mix of new cash as my husband is a higher earner and recycled funds) but again, others on here will probably have more than 52!

Have a lovely day xx

But 1200 kept at 5% on Cahoot will give you more interests in a year than 2 Principality rs ... almost £10 more (it's £60 interest with Cahoot against £52 from Principality). Even deposited in a 5.25% Rs those money would earn more interests in 12 months time

But £1.2k kept at 5% in Cahoot for 6 months would earn less than £1.2k kept in Cahoot and drip-fed into 7.5% Principality RSs. 

That's for sure. But the big question remains. Why should I go for a 6 month Rs when any other 12 month Rs above 5.25% would give me more investing the same amount of money? (Unless, of course, I already own 100 fully funded Rs ...)

In my world Principality 7.5% has the same appeal of TSB or Hsbc 5%. No more than that because Maths is not an opinion

But you're NOT investing the same amount of money for the same time. Two consecutive  6 month accounts use only half the money*time a 12 month account does. So you can put the extra in an easy access account, or spread it over multiple RSs  

Scenario 1 - pay £200 a month into a 6 month RS@ 7.5% result £26.25 interest. Repeat for months 7-12, with the excess in an EA @4%, resulting in total interest of £62.50

Scenario 2 - pay £200 a month into a 12 month RS@ 5.5% for 6 months, then leave the £1200 result £52.50 interest.

Scenario 3 - like scenario 2 but @6.53%, result interest of £62.50.

month	6m RS	EA	12m RS
1	200		200
2	400		400
3	600		600
4	800		800
5	1000		1000
6	1200		1200
7	200	1000	1200
8	400	800	1200
9	600	600	1200
10	800	400	1200
11	1000	200	1200
12	1200	0	1200
£months	8400	3000	11400
rate	7.50%	4%	5.50%
£ interest	52.5	10.00	52.25

Scenario 4 - Feeding £200 a month for the full 12 months @5.5% gives £71.50 interest, but uses £2400 by the last month.

Scenario 5 - Repeating scenario 1, but also feeding £200 into another 6 month RS, matching the payments in scenario 4, gives £115.

So it really depends on what actual rates are available.

Everything interesting, but where it is written that after the first 6 months you'll still have a Principality Rs paying 7.5%?

clivep

It's quite simple really...

A higher interest rate will always pay more interest on the amount actually invested for the time the money is actually in the account.

(Although I have a degree in mathematics, I would have understood this whilst a schoolboy).

Many on this forum making the best use of regular savers will have numerous ones maturing at different times of the year so that the monthly deposits can be funded from maturing a/cs with minimum usage of EA accounts (and probably have several Cahoot Sunny Day Saver 5% EA a/cs in addition to Edge Savers at 6%).

.

francoghezzi

clivep said:

It's quite simple really...

A higher interest rate will always pay more interest on the amount actually invested for the time the money is actually in the account.

(Although I have a degree in mathematics, I would have understood this whilst a schoolboy).

Many on this forum making the best use of regular savers will have numerous ones maturing at different times of the year so that the monthly deposits can be funded from maturing a/cs with minimum usage of EA accounts (and probably have several Cahoot Sunny Day Saver 5% EA a/cs in addition to Edge Savers at 6%).

.

It's not that simple.
The amount of money invested is the same, but the timing is different. In Lloyds more money is available in the account for more time (400 a month instead of 200) hence the difference when it comes to calculate the interest earned (difference reduced drip-feeding the money from an high paying EA account into Principality). You are right, 'time' makes the difference and in this case the higher interest rate is not the winner, because of the timing used to fund Lloyds where the total amount of £1200 is earning interests 3 months before the 1200 will be doing the same, for a month only, with Principality.
Funny, during my Physics lessons, the teacher loved to say that 'time' doesn't exist ... he would be so happy reading this ...

clairec666

Timing has to be considered alongside interest rate, because you want to have your money earning a high rate for the maximum possible amount of time, and minimise the time it spends sitting in a lower rate easy access account.

For myself, I only have regular savers at 6%+ and quite often I'm not able to fully fund them. So the downside of Principality only lasting 6 months has less of an effect on me than it might on others; when it matures, I'll be able to pump it straight back into other high playing accounts.

Even if you have to stick the matured Principality funds in EA for a while, I still maintain that Principality is the better option to the tune of about £5. We may have done our number-crunching in slightly different ways though.

francoghezzi

clairec666 said:

Timing has to be considered alongside interest rate, because you want to have your money earning a high rate for the maximum possible amount of time, and minimise the time it spends sitting in a lower rate easy access account.

For myself, I only have regular savers at 6%+ and quite often I'm not able to fully fund them. So the downside of Principality only lasting 6 months has less of an effect on me than it might on others; when it matures, I'll be able to pump it straight back into other high playing accounts.

Even if you have to stick the matured Principality funds in EA for a while, I still maintain that Principality is the better option to the tune of about £5. We may have done our number-crunching in slightly different ways though.

You got my point. There is a downside with a clear effect on those not funding a lot of Regular Savers. That was what I wanted to highlight after weeks, if not months, of posts that glorified the product that is not, by far, the best on the market and not even between the 10 best by any means unless you are lucky enough to have a good number of Rs already open and well funded. And this, I think, changes a bit the matter. As @subjecttocontract said a Regular Saver that 'didn't warrant 100s of pages'. 

Section62

francoghezzi said:

Eco_Miser said:

francoghezzi said:

But you're NOT investing the same amount of money for the same time. Two consecutive  6 month accounts use only half the money*time a 12 month account does. So you can put the extra in an easy access account, or spread it over multiple RSs

....

So it really depends on what actual rates are available.

Everything interesting, but where it is written that after the first 6 months you'll still have a Principality Rs paying 7.5%?

For that matter, where is it written that Lloyds won't close your Club Lloyds RS after 6 months, or sooner?

None of us know for sure what might or might not happen. We can only make decisions based on what we know now, aided by gut feel on which option might work out best.

I'd rather open a Principality RS @ 7.5% and 'bank' it while it is available, than miss out and regret it. Other people's circumstances will vary though.

francoghezzi

Section62 said:

francoghezzi said:

Eco_Miser said:

francoghezzi said:

But you're NOT investing the same amount of money for the same time. Two consecutive  6 month accounts use only half the money*time a 12 month account does. So you can put the extra in an easy access account, or spread it over multiple RSs

....

So it really depends on what actual rates are available.

Everything interesting, but where it is written that after the first 6 months you'll still have a Principality Rs paying 7.5%?

For that matter, where is it written that Lloyds won't close your Club Lloyds RS after 6 months, or sooner?

None of us know for sure what might or might not happen. We can only make decisions based on what we know now, aided by gut feel on which option might work out best.

I'd rather open a Principality RS @ 7.5% and 'bank' it while it is available, than miss out and regret it. Other people's circumstances will vary though.

Club Lloyds Rs has a fixed interest rate for 12 months. The Rs could be pulled, but those having it will have the same interest rate guaranteed for the whole of the year till maturity. It is the only fixed (at those levels) with Zopa and Fd, with the Zopa one already pulled (it is now a variabile 7.1%) and Fd that pays the rate only to those who don't take the money out before the end (plus a minimum deposit of £25 monthly while Lloyds is totally free)