The Top Regular Savers Discussion Thread

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%).

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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)

clairec666

francoghezzi said:

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

I got your point from the start, just disagreed with your some of your numbers. A lot comes down to personal circumstances, funding levels, etc.

And you make a good point about fixed rates and whether the same rates will be available in 6 months time. I guess that's down to each individual to make their own judgement call, as they would when choosing how long to fix an ISA for. Principality have offered a good rate on the 6 month regular saver for quite a while now. Fair chance it will have dropped to 7% or similar by the time it comes up for renewal. Or they might pull it altogether. There are some providers out there whose regular savers are consistently on offer without much rate variation (Nationwide and Co-op come to mind), others that come and go and you have to grab them while you've got the chance. All things to weigh up when choosing accounts.

jameseonline

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?

Simply put people will already have Club Lloyds etc therefore people need other accounts to gain max interest.

Principality let people have several of the same account through maturity options only.

Section62

francoghezzi said:

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)

You missed the point.  Lloyds could decide they don't want you as a customer any more and give notice to close your account(s).  There's no 'guarantee' you will get a whole year's benefit from the account.

This is probably somewhat less likely than there being no 7.5% Principality RS in 6-months time, but if we are playing a game of 'what if?' then it remains a possibility to consider.  Meanwhile, "we can only make decisions based on what we know now"....

Confused_Dog

It is notable that with the exception of Nationwide, the providers offering the rates above 6% are the smaller providers like Darlington, Principality and Monmouthshire.   That says something. 

It is also worth remembering that there are several types of customers, those who just want one account to save up for a house deposit or a big purchase like a car, those who are happy with a fixed term account so they can use the money for the annual holiday or pay for Christmas, and those of us opening multiple accounts to try and maximise returns and not have all their eggs in one basket.

Those who need a "vanilla" regular savings account for medium/long-term savings,  I don't think are catered for very well by the current regular saver market.  My first regular saver was a "Bonus Saver" account from Nationwide in 1999, which was top in the best buy tables in the newspapers at the time and although there were rules about missing deposits in an account year or the number of withdrawals you could make to ensure your bonus it was open ended; no "after 12 months it will convert to an easy access account" clause". Interest rate in 1999 was around 6% including the bonus, much better than instant access at the time.

It helped me save up enough as a lump sum for the deposit to rent my first flat and for a washing machine and computer.

If one of  the providers offered an account like that now, they might be onto a winner, especially with those starting out in working life.