Opening a RS

Bobblehat

clairec666 said:

At the moment I'll open anything that's 6% or above, although I do still have my Natwest digital regular saver at 5.5% which I've had for ages - it's worth keeping it open because it doesn't mature, so is a useful home for your money longer-term.

Everyone's circumstances are different, so everyone will have different cut-off points. Depends on things like:

• whether you're a taxpayer
• which tax band you're in
• how much interest you're likely to earn in the tax year
• if you're likely to max out your ISA this year
• do you want access to your savings in an emergency
• do you like playing around with spreadsheets to work out how to best spread your money around
• are your regular saver deposits coming from earnings each month, or from existing savings

I guess eligibility/restrictions could be a factor in choosing between similar RS's .... e.g. does the RS require a CA or not , or length of membership, or distance to Branch application only, or App only ..... and other restrictions. 

dealyboy

kermchem said:

I don't have an Easy Access (EA) savings account. I have a portfolio of RS accounts - small by the standards of some forum members. If I had been more organised, and the building societies had been more helpful, then I would have one RS maturing each month and the proceeds going into the remainder. My cash savings are earning between 5.15 and 7.5%, and some of those accounts are accessible.

... wouldn't we all  but they come like buses don't they 

friolento

mon3ysav3r said:

Nobody has seemed to mention whether the APR AER is Fixed or Variable when considering a RS. I do accept a lower APR AER if it is Fixed for a year, because the Bank of England base rate is likely to fall again over the next year, making the RS with fixed APR AER more competitive.

FIXED or VAR is always mentioned in the main RS thread

clairec666

friolento said:

mon3ysav3r said:

Nobody has seemed to mention whether the APR AER is Fixed or Variable when considering a RS. I do accept a lower APR AER if it is Fixed for a year, because the Bank of England base rate is likely to fall again over the next year, making the RS with fixed APR AER more competitive.

FIXED or VAR is always mentioned in the main RS thread

Fixed rates would be a good option right now.
Also worth considering accounts with are variable, but don't seem to slash their interest rates very often - Nationwide and Cooperative come to mind, who have remained at 6.5% and 7% despite successive base rate cuts.

Bobblehat said:

clairec666 said:

At the moment I'll open anything that's 6% or above, although I do still have my Natwest digital regular saver at 5.5% which I've had for ages - it's worth keeping it open because it doesn't mature, so is a useful home for your money longer-term.

Everyone's circumstances are different, so everyone will have different cut-off points. Depends on things like:

• whether you're a taxpayer
• which tax band you're in
• how much interest you're likely to earn in the tax year
• if you're likely to max out your ISA this year
• do you want access to your savings in an emergency
• do you like playing around with spreadsheets to work out how to best spread your money around
• are your regular saver deposits coming from earnings each month, or from existing savings

I guess eligibility/restrictions could be a factor in choosing between similar RS's .... e.g. does the RS require a CA or not , or length of membership, or distance to Branch application only, or App only ..... and other restrictions. 

General "ease of use" and "admin time" would be a factor - e.g. branch-only would put me off unless it was a mind-blowingly amazing interest rate. And only if there was a branch fairly close to home. And I'd favour an account if I already had other savings with the same bank, to avoid having to log in to multiple different places (although that plan rather failed with Virgin... that's a story for another day though )

kimwp

clairec666 said:

friolento said:

mon3ysav3r said:

Nobody has seemed to mention whether the APR AER is Fixed or Variable when considering a RS. I do accept a lower APR AER if it is Fixed for a year, because the Bank of England base rate is likely to fall again over the next year, making the RS with fixed APR AER more competitive.

FIXED or VAR is always mentioned in the main RS thread

Fixed rates would be a good option right now.
Also worth considering accounts with are variable, but don't seem to slash their interest rates very often - Nationwide and Cooperative come to mind, who have remained at 6.5% and 7% despite successive base rate cuts.

Bobblehat said:

clairec666 said:

At the moment I'll open anything that's 6% or above, although I do still have my Natwest digital regular saver at 5.5% which I've had for ages - it's worth keeping it open because it doesn't mature, so is a useful home for your money longer-term.

Everyone's circumstances are different, so everyone will have different cut-off points. Depends on things like:

• whether you're a taxpayer
• which tax band you're in
• how much interest you're likely to earn in the tax year
• if you're likely to max out your ISA this year
• do you want access to your savings in an emergency
• do you like playing around with spreadsheets to work out how to best spread your money around
• are your regular saver deposits coming from earnings each month, or from existing savings

I guess eligibility/restrictions could be a factor in choosing between similar RS's .... e.g. does the RS require a CA or not , or length of membership, or distance to Branch application only, or App only ..... and other restrictions. 

General "ease of use" and "admin time" would be a factor - e.g. branch-only would put me off unless it was a mind-blowingly amazing interest rate. And only if there was a branch fairly close to home. And I'd favour an account if I already had other savings with the same bank, to avoid having to log in to multiple different places (although that plan rather failed with Virgin... that's a story for another day though )

Definitely. Needing a current account with several direct debits puts a regular saver much lower on the list for me - too much faff to make sure that the account was funded for the DDS. (I'll do it for a decent switch). But a current account that needs a set amount popping in and out each month I'm happy to do for 6%.

friolento

kimwp said:

Definitely. Needing a current account with several direct debits puts a regular saver much lower on the list for me - too much faff to make sure that the account was funded for the DDS. (I'll do it for a decent switch). But a current account that needs a set amount popping in and out each month I'm happy to do for 6%.

I am not aware of any pre-req current account which requires DDs.

The only oddity I can think of is First Direct, where the current account is needed to fund the RS. No DDs are mandatory to just have this current account. Whilst this might appear to be a pain, if done right this is a very lucrative pain as you can set up the FD current account with a CASS switch and pocket £175 in a single go. Granted, that switch requires 2 DDs, but even those are easy to set up with the help of information on this forum, and can be deleted once you have received the switch bonus. If the CASS switch is too burdensome for you, you can still get £35 for setting up an FD current account without any DDs.Unless I am mistaken, the £35 can be had in addition to the £175, too, but as I am now on my 15th FD RS and they only allow one sole current account, I am not entirely on top of their current offer terms. The only transactions that ever happen now on my FD current account are the monthly deposits into the FD RS, and the annual withdrawal of my matured RS funds.

dcs34

Another consideration is that (generally) it is usually smaller or more regionalised Building Societies who offer better rates. Therefore holding Regular Savers with them allows one to maintain an active membership with them for the purposes of being eligible for exclusive/loyalty savings products with preferential rates.

saajan_12

IMO its not so much about the absolute rate as much as how the tax adjusted rate compares to what youre getting on normal savings accounts. So assuming you have already exhausted what youd like to put into pensions, S&S investments, LISAs etc and then I'd compare how much extra I'm getting from a regular saver to an easy saver, tax adjusted if applicable. 

*   A 1% difference on a regular saver allowing £250 a month will result in an extra £16.25 over a year.
*   If you're paying higher rate tax then its a £9.75 difference if you've used up the allowance and have no room in ISAs. 
*   If its a RS where you already have a log in, documents sorted etc then its worth the effort for £10. If you need to create a whole new log in, provide proof, etc, then maybe more eg £20-25 before I'll bother. 

friolento

dcs34 said:

Another consideration is that (generally) it is usually smaller or more regionalised Building Societies who offer better rates. Therefore holding Regular Savers with them allows one to maintain an active membership with them for the purposes of being eligible for exclusive/loyalty savings products with preferential rates.

I think we need to distinguish between Regular Savers (upper case RS) and regular savers (lower case rs). 

The former is a time-limited and balance-limited account, usually 12 months but there are some 6, 24, and - very rarely - perpetual variations, all with low monthly max deposit limits. Whilst the lower-case regular savers are just common accounts, usually easy access and without time limit. 

To maintain active membership, the lower-case regulars are much more suitable than the upper case ones because the upper case ones mature and need to be emptied (unless you are happy with miserly interest rates). 

The minimum balance of a lower case account is £0, though some are £10 or even £100, so they are ideal for maintaining a foothold. I have numerous lower case ones with £1 in them, merely to maintain membership / online and app access. The exclusive/loyalty accounts are more often than not of the upper-case RS variety.

Malchester

I have a few RS. I try to have an easy access account along with the RS account (where rates are OK) so I can put 6 or 12 months contributions into the easy access account and set the monthly amount to transfer automatically into the RS account. I can set it up and let it run automatically with no input.