Halifax to relaunch regular saver @10%+

tiptoe_mouse

If the Lloyds TSB acccount is like the one I had, there's no penalty for an early withdrawal.

tiptoe

gelato_cat

Thanks for the reply - and forgive me for being blonde, but do your calculations conclude that I would not be mad to use £3k from my Lloyds account?

Suze

sloughflint wrote: »

For 3 months, your 3 k will be earning 6.25% rather than 8% ie a loss of 1.75% for three months
in order for your RS funds to earn an extra 2% over the year.
I'll do a quick calculation and come back
edit.
Don't know when your funds mature in Septemeber so taking a guess at 90 days
gross loss: 3000*0.0175/365*90=£12.94
gross gain 6000*0.02/12*6.5=£65 ( 12 payments rather than 13)

gelato_cat

There's no penalty - I just can't replace the £3k into the account. So once it's out, it's out. However, I intend to keep putting £250/month in there until it matures.

I'm just finding it hard to do the maths - however, I think sloughflint has given me the answer (and I'm so blonde I can't even see if my idea is a good one)!!!

So, is the general consensus that taking the £3k out of my Lloyds account is a good idea?

Thanks for your patience

Suze

Mikeyorks wrote: »

Depends on the penalty for removing £3k from your 8% account? If it's just pro-rata ... then probably not (mad).

sloughflint

Hi Suzey.
Yes, I calculated that you would be slightly better off taking the money out of Lloyds.
So good idea. Not blonde after all!!!!

gelato_cat

Thanks

I am now ready to sort myself out Halifax-wise then. I'll call them tomorrow morning.

At least I have two weeks to fund the Guaranteed Saver and get my head around the idea of taking money out of my Lloyds account!

Suze

sloughflint wrote: »

Hi Suzey.
Yes, I calculated that you would be slightly better off taking the money out of Lloyds.
So good idea. Not blonde after all!!!!

Mikeyorks

ej3ae wrote: »

I'm still surprised the 13th payment won't be accepted because it talked about one standing order per calender month..

I'm not sure where this belief that a 13th payment won't be accepted has come from. Provided you keep to the max of £500 and only one payment per calendar month ... a 13th payment would be accepted and would earn interest at 10%. I think the mis-understanding (and I do realise that's not your's) has arisen from the debate on whether the amount of interest it will earn is of real value. And in particular whether the benefit (of the 13th) is then negated by the fact it will stop you adding a 1st payment immediately after the anniversary date (otherwise you will be making 2 payments in the same month ... not allowed, even though it's in a different RS 'term') ... if you intend to run the account into a 2nd year?

For what it's worth ... a different view. Where the anniversary is late in the month (using the 25th as an example .. from a recent post) - I think it's beneficial. Particularly if you're going into a 2nd year ..... and most certainly if you intend to vacate after the 1st year. 1st payment is made to hit the account 25th June and create the anniversary date. SO is then switched to make 2nd payment 1st July et seq. 12th payment is therefore 1st May 2009.

A 13th payment 1st June then attracts the 10% for 3.5 weeks .... which has to be beneficial, particularly if you're going to opt out after the 1st year. But even if you don't .... it merely means the 1st payment of the 2nd year can't be made until 1st July 2009. Which only leaves the 2nd year unfunded for 5 days .. not a real issue when considering the extra benefit of the 13th payment?

But if the anniversary date is mid-month or prior ...... best to avoid the 13th payment and opt, instead, to vary the date and fund immediately after the anniversary .... if going into a 2nd year.

And (earlier post) .... you still do get 12 payments in the 2nd year .. from 1st July 2009 to 1st June 2010 (inc) .... until the 2nd anniversary 25th June

Paul_Herring

ej3ae wrote: »

I'm still surprised the 13th payment won't be accepted

The 13th payment is accepted. It simply doesn't stay in the account after the maturity date. Between the maturity date and the next payment the account has a zero balance.

ej3ae

Thanks for the replies - I would certainly much rather get a 13th payment in this year as I don't necessarily plan to continue after that - hopefully they will send the T&Cs with the letters i'm due to get so I can double check it all then anyway. As I'm going to spend the first 6-9 months only putting in £25-50 I won't lose too much sleep over it all.

gelato_cat

One last question (sorry)!

Where does the 6.5 (highlighted below) come from?

Suze

sloughflint wrote: »

For 3 months, your 3 k will be earning 6.25% rather than 8% ie a loss of 1.75% for three months
in order for your RS funds to earn an extra 2% over the year.
I'll do a quick calculation and come back
edit.
Don't know when your funds mature in Septemeber so taking a guess at 90 days
gross loss: 3000*0.0175/365*90=£12.94
gross gain 6000*0.02/12*6.5=£65 ( 12 payments rather than 13)

YorkshireBoy

Suzey wrote: »

Where does the 6.5 (highlighted below) come from?

1st payment earns interest for 12 months, 2nd for 11 months...and so on until the last payment only earns interest for 1 month.

12/12 + 11/12 + ..... + 2/12 + 1/12 = 78/12 = 6.5

It won't be accurate if you mess with the paying in dates (as you probably should do with this one to maximise the return), but for a straight, same day each month regular saver which matures on the anniversary of the first deposit it's close enough.