I need assistance calculating a drip feed structure that optimises interest earned.

Midas_Crotch

Good morning,

I hope everyone's weekend went well.

I'm new to the forum. this thread being my first post!

I'm wanting to drip feed a lump sum of £8000 into 3 separate regular savings accounts, but I'm struggling to work out the structure/split that optimises my return based on the varying interests.

The details are as follows:

EA account @ 4.6% variable.

RS #1 @ 7.1 variable; £300 max. deposit p/m.

RS #2 @ 6% variable; £500 max. depsoit p/m; min. £1 deposit p/m.

RS #3 @ 5.75% variable; £200 max. deposit p/m; min. £1 deposit p/m.

I'm not naturallty comfortable with numbers (an educational failing on my part), hence my concern about failing to maximise returns.

I think I'm right in saying that I should certainly max out RS #1 p/m, but does that also apply to #2 i.e. £356.66 and £1 for #2 and #3 respectively?

Your input and guidance would be very welcome.

Thank you kindly.

clairec666

Just to clarify, do you have the £8000 lump sum ready to deposit right now?

Also, check whether any of the regular savers allow withdrawals. And are you able to skip months? Sometimes the T&Cs say "minimum £1 per month" but also say that you don't have to make a deposit every month.

I'm guessing that the accounts are with Zopa, Monmouthshire and Skipton, right?

Bridlington1

Firstly am I correct in thinking RS1 is the Zopa Regular Saver Pot, RS2 is the Monmouthshire BS RS 8, or possibly AIB Regular Saver, and RS3 is the Skipton RS1? If so there are slightly higher rate regular savers that could be used instead of Skipton. See:

https://forums.moneysavingexpert.com/discussion/6576962/the-top-regular-savers-discussion-thread/p1

If you've a £8k lump sum I would max out the regular savers if I were you, if you run out of money you could empty lower paying regular savers to fund the higher paying ones where the Ts&Cs allow (all of the ones I've mentioned allow either penalty free withdrawals or early closure or both)..

clairec666

Bridlington1 said:

Firstly am I correct in thinking RS1 is the Zopa Regular Saver Pot, RS2 is the Monmouthshire BS RS 8, or possibly AIB Regular Saver, and RS3 is the Skipton RS1? If so there are slightly higher rate regular savers that could be used instead of Skipton. See:

https://forums.moneysavingexpert.com/discussion/6576962/the-top-regular-savers-discussion-thread/p1

Clearly we are geeky enough to be able to guess the regular saver from the interest rate and deposit amount 

trickydicky14

Midas_Crotch said:

Good morning,

I hope everyone's weekend went well.

I'm new to the forum. this thread being my first post!

I'm wanting to drip feed a lump sum of £8000 into 3 separate regular savings accounts, but I'm struggling to work out the structure/split that optimises my return based on the varying interests.

The details are as follows:

EA account @ 4.6% variable.

RS #1 @ 7.1 variable; £300 max. deposit p/m.

RS #2 @ 6% variable; £500 max. depsoit p/m; min. £1 deposit p/m.

RS #3 @ 5.75% variable; £200 max. deposit p/m; min. £1 deposit p/m.

I'm not naturallty comfortable with numbers (an educational failing on my part), hence my concern about failing to maximise returns.

I think I'm right in saying that I should certainly max out RS #1 p/m, but does that also apply to #2 i.e. £356.66 and £1 for #2 and #3 respectively?

Your input and guidance would be very welcome.

Thank you kindly.

Firstly let me say my maths is also not great.

A few questions, will this 8k be all that you can put into the RS’s over the year. Can you access money from these RS’s if needed. If the answer to these are yes then I would say always put your money into the highes paying accounts. So, I would pay the max on all three accounts for the first 8 months then, draw money from the low paying RS and feed that money into the higher ones until you reach the end of the year or the money runs out. Remember all three RS’s are paying more than your EA account. You will have to think again if rates change on individual accounts.

Question, are these the only RS accounts you have access to, you may be able to up the return a little if you can consider other accounts available.

Looks like I was not quick to post as others have said similar things.

Midas_Crotch

clairec666 said:

Just to clarify, do you have the £8000 lump sum ready to deposit right now?

Also, check whether any of the regular savers allow withdrawals. And are you able to skip months? Sometimes the T&Cs say "minimum £1 per month" but also say that you don't have to make a deposit every month.

I'm guessing that the accounts are with Zopa, Monmouthshire and Skipton, right?

Firstly, thank you for the taking the time to reply.

Indeed - ready to be deposited.

As I have a separate cash ISA for any potential withdrawals, I shall only be contributing, and doing so every month.

Ha! Yes. That transparent, eh?

Midas_Crotch

Bridlington1 said:

Firstly am I correct in thinking RS1 is the Zopa Regular Saver Pot, RS2 is the Monmouthshire BS RS 8, or possibly AIB Regular Saver, and RS3 is the Skipton RS1? If so there are slightly higher rate regular savers that could be used instead of Skipton. See:

https://forums.moneysavingexpert.com/discussion/6576962/the-top-regular-savers-discussion-thread/p1

If you've a £8k lump sum I would max out the regular savers if I were you, if you run out of money you could empty lower paying regular savers to fund the higher paying ones where the Ts&Cs allow (all of the ones I've mentioned allow either penalty free withdrawals or early closure or both)..

Thank you for replying, Bridlington1.

Yes, you're correct: Zopa, Monmouthshire, and Skipton.

Thank you for posting that link. I believe I am only eligible for the Market Harborough Fixed Term Regular Saver, as the others available appear to necessitate either having, or opening, a current account with them (by switching) or by opening within branch, the former stipulation putting me off of the First Direct option, though I understand one can create a "donor" current account to mitigate the inconvenience of switching your main account.

Thank you again.

Bridlington1

Midas_Crotch said:

Bridlington1 said:

Firstly am I correct in thinking RS1 is the Zopa Regular Saver Pot, RS2 is the Monmouthshire BS RS 8, or possibly AIB Regular Saver, and RS3 is the Skipton RS1? If so there are slightly higher rate regular savers that could be used instead of Skipton. See:

https://forums.moneysavingexpert.com/discussion/6576962/the-top-regular-savers-discussion-thread/p1

If you've a £8k lump sum I would max out the regular savers if I were you, if you run out of money you could empty lower paying regular savers to fund the higher paying ones where the Ts&Cs allow (all of the ones I've mentioned allow either penalty free withdrawals or early closure or both)..

Thank you for replying, Bridlington1.

Yes, you're correct: Zopa, Monmouthshire, and Skipton.

Thank you for posting that link. I believe I am only eligible for the Market Harborough Fixed Term Regular Saver, as the others available appear to necessitate either having, or opening, a current account with them (by switching) or by opening within branch, the former stipulation putting me off of the First Direct option, though I understand one can create a "donor" current account to mitigate the inconvenience of switching your main account.

Thank you again.

Principality at 7.5% doesn't require a current account with them, and the ones that do require you to have a current account with them don't require you to switch (in other words simply having the current account makes you eligible for the regular saver).

That being said if you can get some money out of them as part of a switching offer whilst you're at it I'd recommend doing so. FWIW I've never switched a main current account but still had many switching offers.

clairec666

Cooperative regular saver at 7% requires you to have a current account, but there's no need to actually use it. It also allows unlimited access to your money. You could also open First Direct at 7%, but your money is locked in for a year. Could be useful if you don't need to access your money. There's also Nationwide at 6.5%.

You could easily open enough regular savers to deposit £3000+ per month, but it depends if you want the hassle of having several accounts with several different banks!

Back to your original question... I would recommend maxing out as many regular savers as you can, until you have deposited your original £8000 lump sum. Find the highest paying easy access account to put the rest of the money in. After your £8000 has been eaten up, and if you haven't got any extra money to put in, you can withdraw from the Monmouthshire account each month to keep feeding the higher-paying Zopa account. The Skipton RS doesn't allow withdrawals, but you could close the account to access the funds (with no loss of interest).

Midas_Crotch

clairec666 said:

Cooperative regular saver at 7% requires you to have a current account, but there's no need to actually use it. It also allows unlimited access to your money. You could also open First Direct at 7%, but your money is locked in for a year. Could be useful if you don't need to access your money. There's also Nationwide at 6.5%.

You could easily open enough regular savers to deposit £3000+ per month, but it depends if you want the hassle of having several accounts with several different banks!

Back to your original question... I would recommend maxing out as many regular savers as you can, until you have deposited your original £8000 lump sum. Find the highest paying easy access account to put the rest of the money in. After your £8000 has been eaten up, and if you haven't got any extra money to put in, you can withdraw from the Monmouthshire account each month to keep feeding the higher-paying Zopa account. The Skipton RS doesn't allow withdrawals, but you could close the account to access the funds (with no loss of interest).

So if I undertand you correctly, you're suggesting I forego an easy access account altogether and simply max out the monthly contributions of the regular savers, pulling from the least paying one and reallocating to the highest once I've exhausted my initial sum? That makes sense.

With regard to First Direct, it seems I misread their conditions, because they only require you to switch to receive the £175 welcome bonus.

Again, thank you for your input.

Midas_Crotch

Bridlington1 said:

Midas_Crotch said:

Bridlington1 said:

Firstly am I correct in thinking RS1 is the Zopa Regular Saver Pot, RS2 is the Monmouthshire BS RS 8, or possibly AIB Regular Saver, and RS3 is the Skipton RS1? If so there are slightly higher rate regular savers that could be used instead of Skipton. See:

https://forums.moneysavingexpert.com/discussion/6576962/the-top-regular-savers-discussion-thread/p1

If you've a £8k lump sum I would max out the regular savers if I were you, if you run out of money you could empty lower paying regular savers to fund the higher paying ones where the Ts&Cs allow (all of the ones I've mentioned allow either penalty free withdrawals or early closure or both)..

Thank you for replying, Bridlington1.

Yes, you're correct: Zopa, Monmouthshire, and Skipton.

Thank you for posting that link. I believe I am only eligible for the Market Harborough Fixed Term Regular Saver, as the others available appear to necessitate either having, or opening, a current account with them (by switching) or by opening within branch, the former stipulation putting me off of the First Direct option, though I understand one can create a "donor" current account to mitigate the inconvenience of switching your main account.

Thank you again.

Principality at 7.5% doesn't require a current account with them, and the ones that do require you to have a current account with them don't require you to switch (in other words simply having the current account makes you eligible for the regular saver).

That being said if you can get some money out of them as part of a switching offer whilst you're at it I'd recommend doing so. FWIW I've never switched a main current account but still had many switching offers.

I now grasp what you're suggesting. 

And I misunderstood the First Direct offer, as they only require you to switch to receive the £175 welcome bonus.

How did you receive the welcome offers without switching, if you don't mind me asking?