when a regular saver is worth it:

Dagobert

deemy2004 wrote:

You spend hours and hours for what ? About £20 more interest ? Is it worth it ?

I couldn't agree more.

deemy2004 wrote:

One thing your forgetting in all the equations.
That is the time it takes to open and maintain an account

But that is precisely where the formulae come in handy: You can see within seconds if the gain g is so small that - according to your personal judgement - it isn't worth the hassle.

I have set the calculations up in an Excel sheet.

I find it quite amazing how easily one can be fooled by big numbers:
A regular saver at 6% with a max. monthly instalment of £250 only gains £15.95 (using the assumptions of my previous example). But I find that the formulae put exactly that into perspective.

Dagobert

Walletwatch wrote:

what I target doing ... is have overdrafts with each of the banks I have regular accounts with, and have my SO for the RS accounts from my curr a/cs with the respective banks. This ensures that I reduce my d to zero, ...

This ensures that the money is sitting in a high interest earning web saver, which I transfer on the SO due date into the current account, in time to cover the overdraft.

Can you pass this one by me again?

With each bank you have a r/s you also hold a c/a with an o/d limit high enough to cover the monthly instalment?
Is the websaver with an external bank or again with each of the banks you hold a r/s? Otherwise you'd be paying for utilizing the o/d facility?

Walletwatch

Have a current account with HSBC, Abbey and Halifax, all of them joint accounts, with overdrafts in HSBC and Abbey. Also have regular savers (one each for me and wife for the highest possible amounts, so £250, £500 and £250 respectively with each bank) The o/d is enough to cover the monthly RS instalments for both me and my wife. Also have a web saver with each of the banks. So, if I have my SO due on the 10th of every month, I maintain a zero balance in the current account and let it go into o/d on the 10th, only to replenish it on the 10th itself, by transferring from my websaver with that bank. This ensures that I do not have to pay any o/d interest either, as I cover the debit on the same date

It does mean that I end up having multiple accounts, but so far as I can access all accounts with a bank on the internet, I really don't see that as a problem. And I also see merit in the view that this may not be actually worth it, as after all, it is just some pence that the days lost in transit is going to cost you. But I am one of those that hates to even part with pennies given in charity to a bank by way of lost interest... so much so that even if I have to transfer money across accounts between different banks, I withdraw cash from one, and deposit it into the other... obviously taking advantage of the fact that I work in Canary Wharf, which is a haven for branch locations.

Ah there, now I digress ;-)

Dagobert

Walletwatch wrote:

Have a current account with HSBC, Abbey and Halifax, ..., with overdrafts in HSBC and Abbey. Also have regular savers ... The o/d is enough to cover the monthly RS instalments ... Also have a web saver with each of the banks.

But how does the money get into the websavers? Unless you carry the dosh to each of the banks, you'll have one external transfer costing x days (d).

Also, the respective banks' websavers don't necessarily offer the bet possible interest rate. For instance, Halifax' websaver is at 4.65%. Some of the building societies don't even offer an online account with a reasonable interest rate at all. Of course, one needs to calculate the break-even point for keeping the money in an external account at the expense of interest lost in transfer.

Walletwatch wrote:

It does mean that I end up having multiple accounts, but so far as I can access all accounts with a bank on the internet, I really don't see that as a problem.

You might if you didn't have ADSL. There are areas in the UK which have no ADSL cover and aren't going to get it anytime soon. The 12th (to-day) is my SO day for my RSs. I visited 4 banks online and it cost me more than an hour. Each page load nearly a minute.
And now I digress.

Walletwatch wrote:

And I also see merit in the view that this may not be actually worth it, as after all, it is just some pence that the days lost in transit is going to cost you. But I am one of those that hates to even part with pennies given in charity to a bank by way of lost interest.

I know the feeling. But "How much is your time worth?" is still a justified question, a personal one at that, beyond the scope of this forum.

I am currently running 6 RSs and the process needs to be automated or I'll end up administering my finances and nothing else (which would only be worth it had I 10 times as much to administer).

Hence I set up a current account with cahoot solely for feeding the RSs, the SOs for which are all on the same day, and only once a month I feed the c/a from one of my savings accounts (from whichever has the lowest interest) one week before SO day to be on the safe side. Not ideal, but at least cahoot's c/a offers 3.93% interest.

Walletwatch wrote:

I withdraw cash from one, and deposit it into the other... obviously taking advantage of the fact that I work in Canary Wharf

I used to do that too during my lunch break when I lived in a city. But now all my banks are only reachable via the internet or post.

Walletwatch

On your first point, fund the websavers for the full amount at the beginning of the period (£6000 for my wife and myself in Halifax, and £12000 in Abbey) - Halifax have just dropped their rate, when my RS started, it was a decent 4.9%. Abbey similarly was 5%, including a bonus for the first six months, after which I promptly opened one for my wife, and moved the money there ;-)

I do agree that you need to be connected via broadband - I do most of the transactions from work itself, use good old Outlook reminders for it.

As I've said, I agree it is a tradeoff between your time and pennies saved, but I don't end up spending more than two minutes per transfer, so I don't really think I'm losing too much on quality time - my work involves getting into a lot of painfully long tele-conference meetings, so this is an activity that I can do many times over when I'm on one of those.

codetown

The formulas on this thread were quite interesting.
Dagobert, could you share the excel sheets you mentioned? I would like to do some direct thinking on my saving accounts...

If you need space to host them, just let me have the file(s) and I will post a public link usable by everyone interested.

stares

I too would be very interested in the spreadsheet.

innovate

Dagobert might not see this thread - if anyone would like, they can PM me with their email address and I would happily send them my interpretation of the thread + after tax calculations.

Have already sent it to codetown about an hour ago, you might put it up on a website for everybody to download from.

SJHowitt

Hi, Frankly I'm lazy, and as this is the only time I get on the web, 9-2 on a saturday, I'm not particularly up for the hard life. I work 6 days a week, (well over 50 hours arrrgggghhhh) because we are trying to buy a house and putting every penny in the bank. We have been saving 3 thousand pounds a year in an ISA, and about a grand a month into an easy saver account both with The Cheshire Building Society, we have a Halifax current Account, and an Abbey National current Account, and I am looking for a Regular Savings Account. I read the stuff about the Halifax Regular saver, but is it wise to have all our eggs in one basket? Also it seems like having 2 more savings accounts as the Halifax tells me I must, will just make the taxman more curious as to why we have all this money saved. We aren't doing anything illegal and its all declared, but we loose over half of our incomes to TAX as it is.
:mad:

We don't smoke/ drink/ live the high life/ have credit card/ loans or anything all we pay is car stuff and rent, but it seems that being good and s aving is making matters worse. Is their a regular savings account which will help rather than hinder?

grumbler

SJHowitt wrote:

...I read the stuff about the Halifax Regular saver, but is it wise to have all our eggs in one basket?

What 'all your eggs'? You cannot put more than £250 p.m. into this account ...

Also it seems like having 2 more savings accounts as the Halifax tells me I must, will just make the taxman more curious as to why we have all this money saved. We aren't doing anything illegal and its all declared,

:mad:

but we loose over half of our incomes to TAX as it is.

Even higher rate taxpayers pay only 40% tax on part of income exceeding £36300 p.a.

... it seems that being good and s aving is making matters worse. Is their a regular savings account which will help rather than hinder?

:mad: