Halifax to relaunch regular saver @10%+

fablad75

Mine already has £1000 in at 7% (at £250/month)... does anyone know if it's worth me closing the acount and starting again at 10%? I have no idea how to calculate this!

Dagobert

PaulHerring wrote:

Assuming closure of a 7% RS reduces the interest on what you've already saved, where would the cut-off where cancelling the 7% (assuming you'll be put down the the websaver rate for cancelling - 4.6%?) be actually profitable?

As has already been stated in post #98, the 12% interest option can be discounted as Halifax do not offer a savings account with a high enough interest rate for the £5000 lump sum to make it worthwhile. Therefore, the following calculations can be based on the 10% option.

Gain from 10% regular saver versus investing £6000 in a 7% 1-year bond:

assuming 6.25% feeder account with Faster Payments option (such as Tescos Internet Saver) and installments 2-12 on 1st of month
£86 if starting if opening on 9th June, £92 if opening on 20th June

Break-even point for cancellation of 7% regular saver

This has to be a rough calculation as early closure will turn the regular saver into a variable rate web saver, currently at 4.36%. Rates were reduced several times last year. I will choose a consevative approach basing the calculations on the lowest rate of 4.36%.

If the regular saver is fed at regular monthly intervals, an average of £1625 is in the account during a 1-year investment period
£250 * (12*13)/12 = £1625
If the account was opened at the end of the month and fed on every 1st, the average increases to £1845:
£250 * (12 + 12*13/2 - 1) = £1845

Early closure will drop the interest rate by approx 2.64%.
The 7% regular saver will yield at most £130 interest during the full investment period (based on highest possible average balance):
£1854 * 7% = £130
Dropping the rate to 4.36 on the day before maturity:
1854 * 4.36% = £81
Therefore the greatest possible loss of early closure is £49. This is lower than the lowest possible gain of the 10% regular saver.

Conclusion: regardles how far into the 7% regular saver period you are, the 10% saver is worth an early closure.

KAB_3

Guardian's view on Halifax 10%/12% Reg Saver

KAB_3

Dagobert wrote: »

As has already been stated in post #98, the 12% interest option can be discounted as Halifax do not offer a savings account with a high enough interest rate for the £5000 lump sum to make it worthwhile. Therefore, the following calculations can be based on the 10% option.

Not listed in the press release or current savings products but there's a possibility of a Guaranteed Saver Reward @ 6.25% as a nominated account that would make the 12% option very viable.

There is a similar Guaranteed Reserve that ends on the launch date so I suspect it is also being revamped and relaunched.

Branch staff and call centre staff obviously not too familiar with the new product and it's Ts&Cs so I'd use the online site on 9th June where possible.

a&akay

The current rules for the 7% say that subsequent payments must be by SO. Barclays SOs are not in the new faster payments scheme but payments are, I've just transfered to Halifax almost instantaneously. Does anyone use payments rather than SOs to their 7% successfully without contravening this rule? I'm hoping the 10% will also accept them if so.

superstar_2

I'm not sure why does this new RS account attracts so much interest or I have missed something here.

The new 10% will give you £325 at the end of one year provided, you make a £500 (Full) payment. That means £6000 at the end of one year. How about taking a, say one year fixed (again, at Halifax to compare) at 6%+, which would easily give you £360++.

Can anyone explain that to me.?

obsessed_saver

Because not everyone will have £6000 lump sum to put into a one year fixed. You can put your £6000 lump sum into the one year fixed, and start another regular saving from your monthly income. That's the idea.

oldfella

I've just transfered to Halifax almost instantaneously. Does anyone use payments rather than SOs to their 7% successfully without contravening this rule? I'm hoping the 10% will also accept them if so.

---

how about making a payment from Barclays to the web saver, then a SO from the web saver to the RS. I guess you would need to get the payment to Halifax the day before the SO, but it would save a day, assuming the web saver to RS is instant.

alternatively - would Halifax actually detect the difference between a SO and a payment - they both use BACS dont they ?

heatherw_01

Does anyone know, is this account better if you have a lump sum to save instead of putting the money in a 6.5% savings account?

How much would you have to save in a 6.5% account to make this one better?

I don't know if I should open this account when it comes out or just put the money in another account.

YorkshireBoy

heatherw_01 wrote: »

Does anyone know, is this account better if you have a lump sum to save instead of putting the money in a 6.5% savings account?

If you're prepared to do a little admin, then over 8% is possible.

By drip-feeding £6,000 into the Halifax account from a decent savings account...

£6,000 x 10% / 12 x 6.5 x 0.8 = £260
£6,000 x 6.0% / 12 x 5.5 x 0.8 = £132
Total......................................= £392 (8.16% gross, 6.53% net)


NB: The above ignores BACS transfer times