Regular saver , what's the point?

Eco_Miser · 19 March at 12:52AM

https://forums.moneysavingexpert.com/discussion/comment/81928226#Comment_81928226

Can you direct me to an account with a worthwhile interest rate that 'lasts forever'? I've seen plenty offering a 5 year fix, and one with a 7 year fix, but all the unlimited life accounts I've had have been variable, and have tended to vary downwards after a few years, while a new account with a table-topping rate is introduced.

masonic · 19 March at 6:59AM

https://forums.moneysavingexpert.com/discussion/comment/81929002#Comment_81929002

It depends what you mean by worthwhile, but if this is of high enough importance, then you'll get more longevity from a low risk investment like a gilt or a short-term money market fund. There are now providers who will manage cash balances for you such that you can turn on interest and have them provide you with an attractive rate using a blend of deposit accounts and such products. It will not be the best rate possible, but it will be a little above the base rate for no effort on your part.

With an individual gilt you could lock in a return of 5.3% over 18-42 years, although I wouldn't recommend using any fixed interest product over such a long timeframe due to inflation risk.

wmb194 · 19 March at 7:43AM

https://forums.moneysavingexpert.com/discussion/comment/81929002#Comment_81929002

That's my point, there isn't one: if you want to earn the best rate of interest there's always going to be the 'hassle' of chasing accounts. As Masonic points out, it's now easy to access money market type returns with no effort from the likes of Trading212 so that could be the compromise - T212 currently offers 3.8% AER on cash in its GIA.

There are very long dated gilts. TR68 will pay a running yield of 5% for the next 42 years. You're taking on a lot of inflation risk though.

https://giltsyield.com/bond/

subjecttocontract · 19 March at 3:35PM

By closing down all my 30+ regular savers the effect on my total projected annual income from cash savings has gone down by around 7%.

nottsphil · 19 March at 10:28PM

https://forums.moneysavingexpert.com/discussion/comment/81929701#Comment_81929701

As 90-odd % of the money in those regular savers would be earning less than 7%, this makes no arithmetical sense.

masonic · 19 March at 10:38PM

https://forums.moneysavingexpert.com/discussion/comment/81930215#Comment_81930215

If £X1 was held in RS earning Y1% interest on average, and £X2 was held in other savings accounts earning an average of Y2% interest on average, then the transition from £X1 x Y1% + £X2 x Y2% to £(X1+X2) x Y2% representing a 7% drop would mean that (X1+X2)Y2 / (X1Y1+X2Y2) = 0.93.

Let's say for sake of argument Y1 is 6% and Y2 is 4%, then there would be a solution when X2 is 5.6 times as large as X1. For example £50k in RS and £280k in other savings. Then moving from RS to other savings would reduce overall interest earned by about 7%. There will be slightly different solutions for different values of Y1 and Y2.

Dizzycap · 19 March at 10:44PM

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

@MyRealNameToo - I totally agree with you along with @flaneurs_lobster's comment too:

"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."

There's also the additional element whereby some of us compound our monthly RS maturities interest and put it into additional monthly RS(s) which we wouldn't otherwise have and once again offering a far better interest rate than any standard easy access account. Personal circumstances will always dictate the saving route you choose and not the opinions of others.