Halifax to relaunch regular saver @10%+

jodders

• Halifax Guaranteed Saver
• Variable rate Halifax Web Saver
• Halifax Premium Savings Direct
• Halifax Saver Reward
• Halifax Instant Saver

Which is prefered as the nominated account? Am I right in saying that to have the above has a nominated account, you need to put in X amount of money to get it started?

trashcan_2

If you pay into your regular saver from your wages thats OK. but if you fund it by transfering money from a savings account to your current account and then on to your regular saver. Thats 3 days from savings account to current account and 3 days from current account to regular saver, not including weekend. Than times it by 12, that a lot of interest lost.

Am i right in my thinking or way-off.

kanchhelskis

if you are with nationwide you can transfer from your e- savings account to your current account instantly.

hyposmurf

Would I be better off just keeping to my ISA that is 6.1% ?Or starting up one of these, as I understand it to be 10% but take off tax and you get 8% which is higher than my ISA.But with my ISA the money will sit there and keep accumulating over time.With the regular saver its out of the account at the end of the year.I only really have enough to put away this year for my ISA limit.Still pondering as to what to do.

mr_fishbulb

hyposmurf wrote: »

Would I be better off just keeping to my ISA that is 6.1% ?Or starting up one of these, as I understand it to be 10% but take off tax and you get 8% which is higher than my ISA.But with my ISA the money will sit there and keep accumulating over time.With the regular saver its out of the account at the end of the year.I only really have enough to put away this year for my ISA limit.Still pondering as to what to do.

If you have a lump sum then put it all in your ISA.

If you have a monthly amount to save, I'd personally put it in an ISA until you fill it up. That way that way you earn tax free interest on it not only this year, but however long you have it in the ISA.

If you have filled your ISA and still have extra money at the end of each month, that's when I'd start putting it into the 10% regular saver.

(Basically what you just said )

Pontiac

Can someone help me out here, I must be having a thick moment and Martin's calculator on the Regular Saver page isn't loading.

Okay I understand it can only earn interest on whatever is in the account at the time. Okay so I'm gonna put 500 in straight away. First months interest, obviously I'm not talking tax here should be 50. Next month, another 500 in another 50... and so on. Now 12 x 50 is 600 which is exactly 10% of the 6000 invested. Now Martin says you should half the sum over the whole year you're putting in, and then work out 10% of that which would be 300... but how does this make sense if it's surely 50 a month interest (before tax).

Sorry for being thick here, can someone explain and tell me how much I'll earn roughly over the year (before and over tax) with the maximum 500 monthly deposit. Many thanks!

TomJ

Pontiac wrote: »

Can someone help me out here, I must be having a thick moment and Martin's calculator on the Regular Saver page isn't loading.

Okay I understand it can only earn interest on whatever is in the account at the time. Okay so I'm gonna put 500 in straight away. First months interest, obviously I'm not talking tax here should be 50. Next month, another 500 in another 50... and so on. Now 12 x 50 is 600 which is exactly 10% of the 6000 invested. Now Martin says you should half the sum over the whole year you're putting in, and then work out 10% of that which would be 300... but how does this make sense if it's surely 50 a month interest (before tax).

Sorry for being thick here, can someone explain and tell me how much I'll earn roughly over the year (before and over tax) with the maximum 500 monthly deposit. Many thanks!

But you're not earning 50 each month, you're earning 1/12 of 50. The first month you put in your 500 an it earns 1/12 of 50 for the 12 months it's in there, or the full 50. You put your second 500 in in the next month; it earns 50 each month, but only has 11 months before the acct closes so only earns 11/12 of 50 over all. The third payment is only in for 10 months before the acct matures and so earns 10/12 of 50 and so on. The overall earning would be (12+11+10+9+8+7+6+5+4+3+2+1)/12*50=78/12*50=325.

thumshie

For those that have already opened one of these accounts - online preferably -does the application take an 'initial deposit'?

Going by the back of the leaflet in branch - and what others have posted - the account year doesn't start till initial deposit, so whould I be right in thinking the following is fine and breaks nothing in the T's&C's.

1.Open account online today.
2.Create SO for first initial payment to be the 27th June- so June payment is before 28th and by SO
3.On the 28th of June modify SO so payment is taken on the 1st July and all subsequent months..

TomJ

dkmax wrote: »

Yes, but while you are waiting to do your timing trick (people typically get paid at the start of the month) your first deposit is losing out on interest. If it is earning zero percent (as it would in many current accounts) you lose about the same as you gain by the timing sophistry. You can minimise the loss only to the extent that you can gain as much interest as you would in the regular payment account - at which point the regular payment may not be the best place for your money.

Firstly, the assumption you are getting zero while you are waiting is somewhat dodgy for many people; it could be earning 6.5% with Kaupthing. Even many current accts pay a decent whack.

Secondly, the reason for going for the RS is the rate of interest is significantly higher than you will get elsewhere; it therefore makes sense to maximise the amount of money that will be in there for as long as possible. The assumption is there is nowhere where it could earn higher interest and there won't be when the account matures; a new RS will start from zero.

As argument from the principle isn't swaying you, and I can't be bothered to set up a proper linear analysis to prove the general case, I've been quite sad and run a spreadsheet to see what the difference in interest earned over the 365 days of this particular acct is; at 10% I calculate you make £29.59 more by opening the RS on 28 Jun rather than 10 Jun and at 12%, £35.51. The interest you've "lost" by not having the acct open at 10% between 10 and 28 Jun is £2.47 (12%: £2.93). If you think that that present value is worth more than a future value of about 30 quid you have one hell of a discount rate! If you've got the money in a halfway decent current acct, like the Halifax High Interest (given that it's a Halifax RS we're discussing...) your £500 will have earnt £1.26, cutting your current "loss" to £1.20 (12%: £1.67), again offset against £30-ish over the life of the RS.

Yes, I suppose £30 is a trivial-ish amount to get het up about, but as the MSE ethos is maximising the amounts we can get from various products, it makes sense to me to ensure everyone has a realistic picture of the detail.

NB - all interest earnt is quoted gross; apply relevant tax rate if you want...

Pontiac

TomJ wrote: »

But you're not earning 50 each month, you're earning 1/12 of 50. The first month you put in your 500 an it earns 1/12 of 50 for the 12 months it's in there, or the full 50. You put your second 500 in in the next month; it earns 50 each month, but only has 11 months before the acct closes so only earns 11/12 of 50 over all. The third payment is only in for 10 months before the acct matures and so earns 10/12 of 50 and so on. The overall earning would be (12+11+10+9+8+7+6+5+4+3+2+1)/12*50=78/12*50=325.

Many thanks Tom, just shows I'm a newbie I was thinking of everything paid monthly and of course interest is worked out on a yearly basis. If only hey!