Regular Savings Accounts Article Discussion

x50smp

As apt correctly points out the savings stay in the "old" account but with new (lower/derisory) interest rates. A further issue to consider is that the old standing order CONTINUES. So I've just cancelled my standing order, moved the funds into a better account and set up a new Monthly Savings Account with Barclays. I wonder how many folks will, through inertia, just continue to let their standing orders run and be pumping money into saomething paying 0.4%?!?!

Milarky

x50smp wrote: »

A further issue to consider is that the old standing order CONTINUES.

Not if you set it up with 12 payments in the first place

x50smp

Good point Milarky. You are obviously more on the ball than me!:beer:

critter_2

Brod_Boy wrote: »

Thanks for the 2 replies. I still believe the lost interest is more than assumed. My calculation was based on getting the £250 into Barclays 4.25% monthly saving on the 8th of each month for 1 year. That was how I arrived that some months the 3 days for the BACS transferr would be over the week-end, hence 5 days and not 3 days. I now realise that I could just set it up so that the money arrived say on the 1st friday of each month and therefore only loose 3 days each month. My £3000 is sitting in my EGG saving a/c geting 3.25%. I therefore still believe that each month on transfer of £250 from Egg to Barclays I will lost £250 x 3.25% for 3 days i.e. 6.67p. Over the 12 months this amount to 6.67p x 12 equals 80p. According to the MSE calculator my extra interest by drip feeding is £13, but I maintain it is really £12.20. This is still worthwhile, but the lost days do need to be taken into account.
I would be interested in any comments.

This 'lost' interest debate is interesting, but should start to disappear as the Faster Payments system is rolled out across most banks.

I bank with Smile and my standing orders (if they're under £250 each) are transferred the same day, so there should be no loss of interest?

I assume Direct Debits are a different animal (which would suit the banks, no doubt) and will continue to take 3 days minimum, but, as most savings accounts are fed by standing order maybe this isn't an issue?

Some banks seem to be dragging their feet with Faster Payment implementation, but you can check which ones are 'live' by checking your sort codes at ukpayments.org.uk


Hope this helps....:beer:

Paul_Herring

critter wrote: »

I assume Direct Debits are a different animal (which would suit the banks, no doubt) and will continue to take 3 days minimum

They are different. They hit the destination account on the same day it's debited from the source account and have done even before faster payments (but it takes up to 3 days to set one up.)

You're perhaps thinking of standing orders?

Dave205

Nottingham Building Society have announced a monthly savings account at 5% gross - it allows up to £100 per month deposits, allows you to miss making payments without loss of interest - however, it is a branch-based account only

However if you live in the area it looks a good deal: go onto the website (won't allow me to post a link but search Nottingham Building Society)

pcyam

I was wondering if anyone else recently had a statment from barclays about their regular monthly savings account which was advertised as paying 6% last year?? I noriced on my statement it says 5.84% got higher gross rate and 2.99% for lower gross rate. does anyone know what this means?? And ive inputted the figures in the calculator and theres a difference of about £10.00. I know theres a few days of interest missing every month because the money doesnt credit account until 3rd of every month. Is it me or am i inputted figures wrong??

TIA

rb10

pcyam wrote: »

I was wondering if anyone else recently had a statment from barclays about their regular monthly savings account which was advertised as paying 6% last year?? I noriced on my statement it says 5.84% got higher gross rate and 2.99% for lower gross rate. does anyone know what this means?? And ive inputted the figures in the calculator and theres a difference of about £10.00. I know theres a few days of interest missing every month because the money doesnt credit account until 3rd of every month. Is it me or am i inputted figures wrong??

TIA

5.84% is the gross annual rate that you get on the account when you don't make any withdrawals.

Because the interest is paid monthly, you earn interest on the interest (this is compounding), so the effective amount that you end up with at the end of the year is 6.00%.

The lower rate is only applicable in any month in which you make a withdrawal. The difference between the lower and higher rates is explained fully in your T&Cs.

Dustykitten

I need some calculation help please.

I can use the tool on here to work out how much cash the kids will get if I renew their regular saver for the year (Halifax 6%). Then if I convert that I can get the comparison interest rate of locking the money into a bond for a year. What I can't work out is how to work out the 'lost interest' from drip feeding from the save4it accounts.

What I want to know is it worth the hassle of going to town queuing in Halifax, them trying to sell me stuff, walking across to my bank and paying the money in for the DD to the regular saver every month for another year (been doing it for 2 years already) or is there a fixed rate savings bond which will give them almost the same amount - thanks clever maths minded people.

atypical

You can use the drip-feed function on the calculator. The interest rate on the save4it account is only 1.05%; you earn £6 in addition to the £39 in the regular saver.

The difference between Halifax's 1 year fix at 2.7% and the regular saver is £12.60.