Being nosey... How many Regular Saver accounts do you have?

Kim_13

They still pay the highest rates obtainable rates on the cash for the period that it is with them. Sure, a 6.5% Easy Access would return more over the year than a 6.5% Regular Saver, but there are none of the former available. Easy Access rates tend to be cut more quickly than Regular Savers, and require all of the money to be available upfront. £1,800 placed into a 3.25% Easy Access now would return roughly £58.50 in a year, while the 6.5% Regular Saver returns the same with the average balance over the year being only £900. 

Regular Savers with maturities spread over the year are therefore the best way to make sure that an Emergency Fund is available, without losing out to inflation since RS rates are more likely to beat it.

For me, filling an RS every month feels like an achievement, whereas saving into an Easy Access was meh and I didn't save nearly as much.

s71hj

Kim_13 said:

They still pay the highest rates obtainable rates on the cash for the period that it is with them. Sure, a 6.5% Easy Access would return more over the year than a 6.5% Regular Saver, but there are none of the former available. Easy Access rates tend to be cut more quickly than Regular Savers, and require all of the money to be available upfront. £1,800 placed into a 3.25% Easy Access now would return roughly £58.50 in a year, while the 6.5% Regular Saver returns the same with the average balance over the year being only £900. 

Regular Savers with maturities spread over the year are therefore the best way to make sure that an Emergency Fund is available, without losing out to inflation since RS rates are more likely to beat it.

For me, filling an RS every month feels like an achievement, whereas saving into an Easy Access was meh and I didn't save nearly as much.

Regular savers are also used like loss leaders, equivelant of the cheap items at front of supermarket that make you think it's a great value place to buy everything. The key, along with much on MSE.Com is not to be the average customer and fall into their traps. But as long as you don't you get pretty great interest rates. 

Bobblehat

luci said:

Can someone explain the attraction of RS’s? From my understanding, a 6.5% RS actually yields around 3.25% over the year. I’m clearly missing something obvious here, especially when I read that someone was funding theirs from an ISA account.

I practically lived on the MSE forums for years and kept myself well informed. Unfortunately, ill health has kept me away from the forums for the past few years, but I’m trying to get back into it.

Thanks.

One of the best ways to explain it (pinched this from another forum member) is to think of your money sat in a typical 4% easy access account (ISA or non-ISA). In the next month it would earn a month's worth of interest at 4%. Instead, if you were to move some of that money e.g. £300 to a RS paying 6.5%, in the same month it would earn a months worth at 6.5% instead of 4%. Do this the next month and the second £300 would earn interest at 6.5% instead of 4%, and as a bonus, your 1st £300 you paid into the RS the month before is still earning interest at 6.5% too instead of 4%. Repeat for as long as the RS lets you. 

The net effect is that an RS with a higher interest rate will beat an easy access with a lower interest rate. The actual gain is roughly (very!) 1/2 the difference between the two rates. So 0.5 x (6.5% - 4%) = 1.25% ... gain over leaving  your money in the easy access. This works for as many months (or typically 1 year) as the RS lets you add money.

This page is a calculator that you can plug some of your own figures in to see what you would gain with different rates and monthly contributions. Use the drip feed option if needed.

https://www.moneysavingexpert.com/savings/regular-savings-calculator/

Cisco001

Kim_13 said:

Regular Savers with maturities spread over the year are therefore the best way to make sure that an Emergency Fund is available, without losing out to inflation since RS rates are more likely to beat it.

Not necessary an issue, most RS account allow withdraw or early closure.

DRS1

luci said:

Can someone explain the attraction of RS’s? From my understanding, a 6.5% RS actually yields around 3.25% over the year. I’m clearly missing something obvious here, especially when I read that someone was funding theirs from an ISA account.

I practically lived on the MSE forums for years and kept myself well informed. Unfortunately, ill health has kept me away from the forums for the past few years, but I’m trying to get back into it.

Thanks.

Who can explain why people get addicted to anything.  Clearly RSs can become addictive.  Sure signs you are an addict include opening accounts which

mature in 6 months time or

only allow you to save £50 per month or

require you to open a current account that you otherwise did not need or want.

I seem to have got myself on the list by admitting to having a very old RS paying 2.45% (I thought that would shock the RS regulars who wouldn't look at anything paying less than 6.5%).

I actually have another paying 5% which auto renews so survives only because I have done nothing about it.

But the worrying thing is that I have now opened a new RS at Manchester BSoc.

So in the spirit of Halloween you will see me Zombie walking up the table.

Monthly amount is £1200.

20122013

Apologise if this has already been mentioned,  I was wondering how much will be needed  to fund the maximum allowed to all the RS which can be opened online (exclude the ones in Ireland, or need to be open at a branch / via post )? would it be about £10,000pcm or more?  (Not looking for an exact figure as the product changes)

Kim_13

20122013 said:

Apologise if this has already been mentioned,  I was wondering how much will be needed  to fund the maximum allowed to all the RS which can be opened online (exclude the ones in Ireland, or need to be open at a branch / via post )? would it be about £10,000pcm or more?  (Not looking for an exact figure as the product changes)

7%+ - £1,350
6.5% - £900
6.25% - £400
6% - £500

So £3,150 for every account paying 6% or more, if I’ve counted them correctly. These would also require current accounts with Co-Op, Zopa, First Direct, Virgin Money, Nationwide and Lloyds (Club.)

Depends what your threshold is.

clairec666

20122013 said:

Apologise if this has already been mentioned,  I was wondering how much will be needed  to fund the maximum allowed to all the RS which can be opened online (exclude the ones in Ireland, or need to be open at a branch / via post )? would it be about £10,000pcm or more?  (Not looking for an exact figure as the product changes)

Doing a rough calculation, going through moneyfactscompare's list from the top, you can get to £10000 with all the online-opening regular savers paying over 4% interest.

kermchem

20122013 said:

Apologise if this has already been mentioned,  I was wondering how much will be needed  to fund the maximum allowed to all the RS which can be opened online (exclude the ones in Ireland, or need to be open at a branch / via post )? would it be about £10,000pcm or more?  (Not looking for an exact figure as the product changes)

Earlier in this thread I said that my modest collection of 16 RSs could take £4275 per month. Those with larger collections could easily exceed £10k. You could not start from zero and save that much this month.

Bridlington1

clairec666 said:

20122013 said:

Apologise if this has already been mentioned,  I was wondering how much will be needed  to fund the maximum allowed to all the RS which can be opened online (exclude the ones in Ireland, or need to be open at a branch / via post )? would it be about £10,000pcm or more?  (Not looking for an exact figure as the product changes)

Doing a rough calculation, going through moneyfactscompare's list from the top, you can get to £10000 with all the online-opening regular savers paying over 4% interest.

I've just done a quick calculation of the accounts currently on p1 of the main regular savers thread as there's some accounts missing from moneyfacts.

Using an assumed mean, these are the totals I came to:

Open to all:

£11,850 if you exclude SRBS (can be opened online but withdrawals/closure are branch/post).

In addition there's £7,150 in accounts that didn't meet the criteria specified by @20122013, due to branch/post opening.

I don't know how you'd wish to categorise SRBS as it can be opened online but withdrawals/closure are branch/post, but that's another £1k.

Local/loyal/beta/new customer only:

£4,550- Note it's impossible to hold all of these accounts due to eligibility criteria of the individual accounts.

There's then another £500 in children's accounts.

Thus if you include children's accounts and assume my calculations are correct (they may not be, I've done then quite quickly) there's enough regular savers to absorb £25,050/mth though in practice it's impossible to hold all of them simultaneously.