HSBC Regular Saver Account

teebee_4

Martyn

Is this worth doing?

I have both a salary and a pension - the monthly pension is greater than the HSBC Regular Saving account maximum (£250)
As I am able to save this amount each month and won't require the money for any other purpose, I am looking for the maximum return

If I open a standard HSBC current account (no cost) and asked them to switch payment of my pension from my existing bank account (not HSBC) to the new HSBC account, I keep my salary going into a high earning internet account. I beleive HSBC accept either a pension or salary

Set up 2 standing orders from new HSBC account 1 for £250 to Regular saver account and the second for the balance (Excess of Pension less £250) to go to my high earning internet account

After first anniversary close down the accounts and transfer monies into the best available then

Why do all of this? - To gain a fixed intrest of 8% gross over the next 12 months as opposed to circa 4.5% - 7% else where

Heinz

I was saving £250 per month in a Halifax Regular Saver A/C last year (the first year they were available - when the gross was 6%).

I sounded like a great deal at the time (it was an MSE recommendation as well) and so I decided to keep it going this year (now that the gross has increased to 7%).

However, you have to realise that, because of the 'drip feed' effect of only being able to put £250 per month in, the interest is only really paid on an average of £1500 rather than the £3000 you have paid in over 12 months.

For me, that meant the gross interest on the £3000 I paid in in the first year was only £97.70 - which is actually 3.256666% - nowhere near the 'claimed' 6%. In case you're wondering about that calculation and the statement in the previous paragraph, the easiest comparison method is to work out what 6% of £1500 is (it's £90).

Don't get me wrong, the A/C made more than I would have had I not transferred the money but the small gain did make me wonder why I bothered!

Hobo_2

These Regular Saver accounts vary in design, HSBC sweeps out after 1yr & ends were as HFX sweeps out but you start again for another year if you maintain the SO, thats why they pay 8% & 7% .
Regular savers that "Accumulate over time" are more attractive maybe as long as a decent rate is maintained.
Scarborough @ 6% variable £10-£250 to a total of £15000 = 5yr with interest drawn away. (also as cash ISA )
Leeds & Holbeck @ 5.50% £20-£500 no end date

Remember days interest lost on time it takes to SO each month.

davidsmoney

http://www.hsbc.co.uk/1/2/personal/savings/regular-saver;jsessionid=00002Bylxt2e5aDTBMYFaaAwdTH:11j74l29q

With regards to the HSBC regular saver at 8%, does this work out?


It says I can pay in £250 to start, then £250 more than the previous balance:

"The maximum balance starts at £250 in month one and then increases by £250 each month thereafter."

I understand I only get interest on what is in the account each month:

£250 + 8% = £20
£500 + 8% = £40
£750 + 8% = £60
£1000 + 8% = £80
£1250 + 8% = £100
£1500 + 8% = £120
£1750 + 8% = £140
£2000 + 8% = £160
£2250 + 8% = £180
£2500 + 8% = £200
£2750 + 8% = £220
£3000 + 8% = £240

Total interest = £1560

Maybe I have my maths wrong?

Biggles

davidsmoney wrote: »

Maybe I have my maths wrong?

I think the maths is fine, you've just over looked the 'per annum' bit of the interest.

danny69

If you are saving exactly same amount each month then the best way to work it out is 8% of half the total sum. So 8% of £1500.

sloughflint

danny69 wrote: »

If you are saving exactly same amount each month then the best way to work it out is 8% of half the total sum. So 8% of £1500.

A closer approximation can be obtained by thinking of it like this:

The first payment earns interest for 12 months
The second payment earns interest for 11 months
The last payment earns interest for 1 month.

This can be compared to saving a single £250 for 12+11+10+1= 78 months or 78/12ths of a year ( 6.5 years)

With an annual rate of interest of 8%, this would be:

250*6.5*0.08= £130 gross interest.

Biggles

sloughflint wrote: »

With an annual rate of interest of 8%, this would be:
250*6.5*0.08= £130 gross interest.

In other words, just divide your figure of £1560 (which you arrived at by using 8% per month) by 12!
;-)

sloughflint

I was replying to post 6 Biggles.

I always prefer to use the 6.5 approximation to just halving the closing balance.

Biggles

sloughflint wrote: »

I was replying to post 6 Biggles.

Yes, I know, I was following up my previous reply to post #4.

;-)

Lindy-Lou_2

You might like to have a look at Abbey/Santander as they had a good RS but don't know if it is still on. Sorry haven't got time to look at it now but hope you have as it may be worthwhile.

Lindy-Lou