Regular saver , what's the point?

borderline

I don't understand the point of a savings account that in the end you are going to only gain £25.

For instance Principality pays 7.5% in interest, you have to deposit £200 every month for 6 months only ( no withdrawals) to get in the end £1,225.93 , that's an interest earned of £25 at the end of the 6 months . Is it worth the hassle?

Bigwheels1111

If you do not understand, Do not do it.

Simple.

I'm winding down reg savers as rates have gone down, Plus tax reasons.

Principality, I had 5 reg savers, Now enforcing 1 per issue limit.

I now have 10/12, Was at 22 last year.

The simple fact is 7.5% interest is 7.5% interest.

Virgin was over 10% last year.

masonic

The gain should be compared to the interest you'd receive from leaving the money wherever it is, so is likely to be less than £25. Whether it is worth the hassle is subjective. For some not, for others every little helps. You'd get a much better outcome on one of the many 12 month regular savers. There are some that last for a couple of years.

thefrank

https://forums.moneysavingexpert.com/discussion/6659925/regular-saver-what-039-s-the-point

Much better outcome from any Regular Saver above 6.25% and lasting 12 months than the Principality one (after considering the interest you could earn with drip feeding from a decent account). The interest rate is just one side of the matter, it looks pretty, but in reality lasting only 6 months put that regular saver way far from the best: it is just a very smart marketing move (that caused few people even on this forum to go bananas for no reason), and Zopa just followed in the same direction reducing from 12 to 6 months its 7.1% saver

MyRealNameToo

Mainly there for those that want to actively save rather than having a lump sum to save up front. For them the headline rate is much more appealing than the 3-4% being offered for a normal savings account in which they deposit £200 per month.

flaneurs_lobster

Depends on your attitude to "hassle".

Bit of setup of the account and standing order, 10 minutes work?

7.5% is hard to beat elsewhere.

Few people would consider having just a PrinBS RS as a complete savings solution, it would often be used alongside several (or many) other regular savings accounts.

jimjames

I'm sure most people would think being paid £25 for under 30 mins work was pretty good going

LHW99

https://forums.moneysavingexpert.com/discussion/comment/81925097#Comment_81925097

But only the first deposit receives the full length of time earning interest, each month's worth is there for a shorter time, and the final month is only earning interest for one month. Surely the actual interest earned until the end of the account isn't 7.1% of the total saved?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81925190#Comment_81925190

Many seem to believe that a regular saver account should earn the full headline interest rate on the final balance but of course that's not the case, for the reason you describe.

flaneurs_lobster

https://forums.moneysavingexpert.com/discussion/comment/81925190#Comment_81925190

No it's not, nor does it claim to be. The Annual Percentage Rate is the common measure for all savings products, shows how much interest will be earned IF funds are deposited for 1 year.

So a 6 month product (like PrinBS's RS) is described as 7.5% APR, which allows its return to be compared to that for a 12 month product, even though the actual return is not 7.5%. The 'actual' return of that product over 6 months is around 2% of £1200 (£25 interest for 6*£200 deposited over six months) although that takes no account of any returns from deposits held elsewhere for 5 months.

snookerloopy96

I know enough people who have thousands in accounts earning 0.75%-1% for me to think it IS worth any hassle.

Its literally money for doing nothing.