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Regular Savings Accounts Article Discussion

edited 14 June 2010 at 5:09PM in Savings & Investments
777 replies 251.7K views
Former_MSE_DanFormer_MSE_Dan
1.6K posts
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edited 14 June 2010 at 5:09PM in Savings & Investments
This thread is specifically to discuss the

Regular Savings Accounts article

which includes new calculator to work out the interest


To discuss or ask a question about this article, click reply
MSE Web Editor, mainly responsible for looking after, and keeping up-to-date, ‘hard-core’ financial articles such as credit cards, savings and loans.

If you spot a rate change that we haven't already mentioned or added into articles or tips, Please send me a PM about it




Don't miss urgent MoneySaving, hear first by getting Martin's Money Tips Free E-mail at www.moneysavingexpert.com/tips
«13456778

Replies

  • D.A.D.A. Forumite
    1.2K posts
    Part of the Furniture Combo Breaker
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    My wife already has a Halifax Regular Saver account. I'm wondering if the 10% rate only applies to new customers, or existing ones?
  • miss_jcmiss_jc Forumite
    3 posts
    I am currently looking for mortgages to buy my first home.

    What do people think about opting for an interest only mortgage - let's say with a fixed rate of 6.5% for 2 years and saving regularly with the halifax regular savings earning 10% and repaying the sum saved at the end of the fixed term?

    Sorry if this seems a silly question. I am new to this 'working out finances' thing and while it seems to make sense to me no-one else seems quite convinced. It would also give me a degree of flexibility as I start off...

    Thoughts greatly appreciated!!

    miss_jc
  • fagunfagun Forumite
    411 posts
    The artricle has a small mistake regarding the Halifax RS account. The Guaranteed Saver Reward can be a nominated account and pays 6.25%, with one withdrawal allowed during the year. Compared to 7.01% fixed term deposit, you're just over £20 better off if you're saving the full £500 / month.
  • Hi, I note in this section that you say don't bother with HSBC, but for those who already have a plus account (such as I with a Graduate plus account) it negates the monthly fees if your overdraft is reinvested in the reg saver account.

    A quick calc allowed for 1225 deposit in the first month and £25 thereafter (totalling £1500 - the usual size overdraft) giving £135 pretax, whereas the fee for this type of account is £9.95 per month.

    So by using your overdraft for this purpose you gain the services offered on the plus account as well as £15!! or post tax it costs around £10 for the year, which is a darn sight better.

    Not that I can do this, as I was pretty heavily into my overdraft after uni :-(

    :beer:
  • kamari_2kamari_2 Forumite
    2 posts
    Interesting to hear about the new 10% regular saver account from Halifax. I currently have a regular saver with them, at 7% interest. I phoned them today to ask if the new 10% rate would apply to it and was told it would not, I would have to close it and open a new one. If I did that I would lose interest for the 6 months I have already saved. So not a particularly good deal for me and probably others!
  • MilarkyMilarky Forumite
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    Part of the Furniture 1,000 Posts
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    Kamari wrote: »
    Interesting to hear about the new 10% regular saver account from Halifax. I currently have a regular saver with them, at 7% interest. I phoned them today to ask if the new 10% rate would apply to it and was told it would not, I would have to close it and open a new one. If I did that I would lose interest for the 6 months I have already saved. So not a particularly good deal for me and probably others!
    Psst! Could you get a relative to open one in their name and you fund it? (If that were an option then you could drop your existing account sub to £25 and put as much as you can afford regularly toward the 10% account)
    .....under construction....
  • Former_MSE_DanFormer_MSE_Dan
    1.6K posts
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    Paul_Grist wrote: »
    Hi, I note in this section that you say don't bother with HSBC, but for those who already have a plus account (such as I with a Graduate plus account) it negates the monthly fees if your overdraft is reinvested in the reg saver account.

    A quick calc allowed for 1225 deposit in the first month and £25 thereafter (totalling £1500 - the usual size overdraft) giving £135 pretax, whereas the fee for this type of account is £9.95 per month.

    So by using your overdraft for this purpose you gain the services offered on the plus account as well as £15!! or post tax it costs around £10 for the year, which is a darn sight better.

    Not that I can do this, as I was pretty heavily into my overdraft after uni :-(

    :beer:

    Hi Paul,

    I dont think this works in the way that you say, as you can only deposit a maximum of £250 a month, so the lump moved in the first month wouldnt be possible.

    But you are right in a way; we include the HSBC account purely because if you do not want to leave its current account at all, it is one way to claw something back. We just don't want anyone to get one of the expensive HSBC bank accounts if they dont already!

    Dan
    MSE Web Editor, mainly responsible for looking after, and keeping up-to-date, ‘hard-core’ financial articles such as credit cards, savings and loans.

    If you spot a rate change that we haven't already mentioned or added into articles or tips, Please send me a PM about it




    Don't miss urgent MoneySaving, hear first by getting Martin's Money Tips Free E-mail at www.moneysavingexpert.com/tips
  • ibrooksibrooks Forumite
    9 posts
    Is there a step by step guide somewhere to calculating what the interest would be over 12 months for a given AER?

    Basically I'm looking at this new Halifax regular saver and trying to work out what my numbers would be - but..... I can't use the calculator as I'm planning to do the drip-feed but not quite the way you've described.

    Say I had £3k - I can't shove it all in there on day one but I can deposit it at a rate of £500 per month for the first 6 months. That way I've got as much money in there as possible for as long as possible. Now for the remaining 6 months I drop back to whatever I can afford from my monthly budget but making sure I stay above the £25 minimum. So I'll know my running total for what I've paid in but how would the 10% AER be calculated over the 12 months? The half it rule of thumb would presumably be low because the final amount paid in is weighted towards the beginning of the year.

    :confused:
  • LavendyrLavendyr Forumite
    2.2K posts
    Yes, the calculator linked to in the OP will help you. :)
  • Paul_HerringPaul_Herring Forumite
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    ibrooks wrote: »
    Is there a step by step guide somewhere to calculating what the interest would be over 12 months for a given AER?

    If you want the step by step method/proof rather than just taking any calculators on trust...

    £x - the amount deposited per month
    y% - the Gross/AER (This assumes interest paid yearly.)

    In the first month, you deposit £x, and it acquires 1/12th of y% interest - £x * y%/12
    In the second month, you deposit another £x, and the £2x gets another 1/12th of y% interest - £2x * y%/12
    In the third month deposit another £x resulting in £3x * y%/12 interest for the month
    In the fourth month ... etc.

    So for the full year you have interest of (£x + £2x + £3x+... + £12x)* y%/12

    1+2+3...+12 = 78 So

    Interest = £78x * y%/12 or simplifying (multiply both by 12)
    Interest = £6.5x * y%

    So the quick calculation is to take your monthly deposit, multiply by 6.5 and apply the AER interest to the result. Don't forget to apply income tax at your marginal (top) rate before using the result.
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