To use regular savers or not

topyam

Confused and can't get my head around whether regular savers accounts are an option for me...

I have savings - over £30k
What i can't understand is whether i am better having this in an easy access account paying a decent rate, or moving some into regular savers accounts?
Surely a decent amount is better altogether earning interest?

Sorry - I have read up on regular savers accounts, but still think I'm missing something in my understanding as so many of you use them. 

eskbanker

It's entirely up to you - the total interest earned by feeding regular savers from your easy access account will be more than leaving it all in the one place (assuming you're using regular savers paying a higher interest rate), but it does involve more effort.

clairec666

You're asking in the right place! Lots of regular saver experts here.

Put the money in the highest-paying easy access account, so it's all earning interest from day 1, and each month move the maximum amount over to a regular saver account, where it will get a higher rate of interest. Each regular saver has a limit (usually £250 a month or similar, some up to £500). You can open several regular savers with different banks, which increases the amount you're able to put in each month. Downside is having to deal with multiple login details for different banks, but with a little effort you can earn yourself a nice chunk of extra interest. Not too difficult to increase your deposits to £3000 a month, which means in 10 months time all your savings will be earning around 6% or more (not taking into account future interest rate drops) and in the meantime the rest of your money will still be gaining some interest in the easy access account.

EDIT: also bear in mind whether you want access to your savings - some regular savers restrict access until the end of the fixed term, whereas some allow unlimited withdrawals.

RunsFromRobots

My regular saver with Virgin matured recently which was 10% on £250 per month. This yielded just over 5% on £3,000 over 12 months.

If you have capital already I don't see them as a great return but are good for those looking to start saving from scratch. 

clairec666

RunsFromRobots said:

My regular saver with Virgin matured recently which was 10% on £250 per month. This yielded just over 5% on £3,000 over 12 months.

If you have capital already I don't see them as a great return but are good for those looking to start saving from scratch. 

They're still a great return.

eskbanker

RunsFromRobots said:

My regular saver with Virgin matured recently which was 10% on £250 per month. This yielded just over 5% on £3,000 over 12 months.

If you have capital already I don't see them as a great return but are good for those looking to start saving from scratch. 

OP, while learning, would be well advised to ignore the old 'only getting half the advertised rate' trope that features so frequently in any discussions about regular savers!

sausage_time

RunsFromRobots said:

My regular saver with Virgin matured recently which was 10% on £250 per month. This yielded just over 5% on £3,000 over 12 months.

If you have capital already I don't see them as a great return but are good for those looking to start saving from scratch. 

If a feeder account was earning 5%, the overall return would be around 7.5%.   Worth the effort in my opinion.

clairec666

sausage_time said:

RunsFromRobots said:

My regular saver with Virgin matured recently which was 10% on £250 per month. This yielded just over 5% on £3,000 over 12 months.

If you have capital already I don't see them as a great return but are good for those looking to start saving from scratch. 

If a feeder account was earning 5%, the overall return would be around 7.5%.   Worth the effort in my opinion.

I'd make the effort too. Unlikely to find another 10% account any time soon, so the boost won't be quite as good. Probably 6%. And to get that average on the full £30k would need multiple regular savers.

A lot depends on whether the OP wants the hassle of managing multiple accounts. Unlikely to find an easy access account that pays 5% interest AND pays out standing orders, so human intervention will be needed to move the money around each month.

No harm in sticking it all in the best easy access account for now, decide whether you favour "best interest return" or "simplicity", and ask for help here if want to go the whole hog on playing the regular saver game.

kimwp

In simple terms, you start with 30k in a basic saver, earning (for example) 4%. You then open a 7% regular saver and move £250 across. That £250 is now earning 7%. Then the month after, you move another £250 to the regular saver, so you now have £500 earning 7%. And so on.

mon3ysav3r

Another advantage of having regular savers is that if that institution releases another good product, you are known to them and can usually open it quickly online.

Also note that when Principality, Suffolk, Darlington and Monmouthshire release new issues they generally allow you to have multiple regular savers (one of each issue, but of course future issues might have different rules).

EDIT - I only started opening regular savers in anger this year, sort of glad I didn't do it earlier as many of the smaller Building Societies have only recently added an online banking ability on their websites;  Not interested in doing phone/postal banking with passbooks.

trickydicky14

RunsFromRobots said:

My regular saver with Virgin matured recently which was 10% on £250 per month. This yielded just over 5% on £3,000 over 12 months.

If you have capital already I don't see them as a great return but are good for those looking to start saving from scratch. 

Don't agree, it does not matter how much capital you have, if you are happy to put the time in you will get more interest. Folks on this forum put anything from a few hundred pounds up to 5,6,7K a month into RS's. Just pick the right one's to max your savings.