Regular Savings Accounts Article Discussion

Paul_Herring

mary wrote: »

Is it compulsory to have your salary paid into the Current account, and then fund the Regular Saver, or can you transfer in any old £1,000 just for the exercise. Do they insist on it being salary? Anyone know?

Most will take any old '£1000.'

dee100

Am having difficulty in finding a high interest savings ac that will allow me to do standing oders into my regular saver at a diff bank/bs. called west brom and scarborough, don't allow so's.
I prefer to deal with british banks.
Who do you suggest/

mandv

I used Money Saver calculator to work out the interest I should have received fron my regular saver account with the Abbey. I saved for 13 months, £250 per month @10% interest. The calculater said the interest should have been £150.20. In fact I only received £109. I phoned Abbey to query this and was told that this is the way they work out the interest on regular savering a/cs, as interest is only added at the end of the period of investment. So in fact the interset I received was more like 7% than 10%.

craig86

mandv wrote: »

I used Money Saver calculator to work out the interest I should have received fron my regular saver account with the Abbey. I saved for 13 months, £250 per month @10% interest. The calculater said the interest should have been £150.20. In fact I only received £109. I phoned Abbey to query this and was told that this is the way they work out the interest on regular savering a/cs, as interest is only added at the end of the period of investment. So in fact the interset I received was more like 7% than 10%.

Hi mandv.

I don't think it's a swindle. If you paid in 12 monthly payments of £250, after the 12th payment was made you should have accrued roughly £136 in interest. This is then taxed at 20%, leaving you with £109 (i.e. your final balance should be £3109).

Therefore, you did earn gross interest of 10%, but net interest of 8%. (If your earnings should be tax-free then you should try to claim back the tax.) Although interest was added at the end of the period, most accounts will calculate interest daily.

Hope this helps!

craig86

A quick heads-up. I opened a Barclays regular saving account today. The lady seemed convinced that the rate had been cut from 7.75% to 7.25% (after reading a memo this morning saying the interest on all savings accounts had been reduced by 0.5%), although the computer said that it was still at 7.75%. So I wouldn't be surprised if it came down in the next few days.

Also, with the Bank of England predicted to cut the base rate tomorrow, anyone wanting to open a regular saver should probably do so now before any rate cuts.

abigail_randall

A quick question from a total virgin as far as this money stuff is concerned:

The regular savings idea interests me. My ISA is full until April, and I've got around £1500 to put away each month.

However I am unwilling to commit myself to a fixed rate account as I'll be watching the property market with a view to potentially buying a house in the next 6 months to a year should prices reach my range.

So I would be able to meet the monthly deposit requirements of a regular savings account, but my question is, would they penalise me should I want to close the account before the 12 months was up, eg to use it to buy a house? Is there any potential way around this, eg putting in the minimum required but withdrawing the rest?

Does this make any sense??

Thanks - I'd very much appreciate some advice.

(Likewise on fixed rate accounts, in a similar vein - is it possible to circumvent the fixed time period of say a year if you close the account before the time is up?)

Milarky

Heads up. Skipton Special Saver/Christmas saver being cut from 6.55% to 5.30% from today [5.12.08] -1.25%

https://www.emoneyfacts.co.uk/news/news-search.aspx?newsarticleid=179127

So Skipton may well drop to 4.65%, following from the MPC decision yesterday , since their cuts appear to one month later and 0.25% less [i.e. last one was -0.25% on 6.11.08]

Paul_Herring

abigail_randall wrote: »

A quick question from a total virgin as far as this money stuff is concerned:

The regular savings idea interests me. My ISA is full until April, and I've got around £1500 to put away each month.

However I am unwilling to commit myself to a fixed rate account as I'll be watching the property market with a view to potentially buying a house in the next 6 months to a year should prices reach my range.

A possible solution would be to set up a 3 month fixed rate ladder (https://docs.google.com/View?docID=dwnwdnb_66drzgz6f4&revision=_latest&hgd=1 describes a 12 month version) using 3 month fixed rate bonds; though interest rates on 3 month FRSBs are a bit dire at the moment. (The advantage being, you'd have at least some of the money at 'short' notice, and the longest you'd have to wait for all of the money would be 3 months.)

kelvinhanratty

craig86 wrote: »

A quick heads-up. I opened a Barclays regular saving account today. The lady seemed convinced that the rate had been cut from 7.75% to 7.25% (after reading a memo this morning saying the interest on all savings accounts had been reduced by 0.5%), although the computer said that it was still at 7.75%. So I wouldn't be surprised if it came down in the next few days.

Also, with the Bank of England predicted to cut the base rate tomorrow, anyone wanting to open a regular saver should probably do so now before any rate cuts.

7.75% is the AER (Annual Equivalent Rate - i.e. interest compounded). You will have been given the gross rate. Payment needs to be made by standing order into the account, so any (additional or non-standing order) payments or any withdrawals will mean that the lower rate will apply the following month, as the account criteria will not have been met.

kelvinhanratty

You need to ensure that the first payment reaches the account by 31st December 2008, otherwise the account will pay out at 6% AER if received in January.

As for the main article stating that you can pay by cheque, I'm not so sure ... payment must be made by standing order into the account, not by funds transfer.

I would therefore recommend that if you're a Barclays account holder, to ensure that the first payment is made as an "immediate payment" on the standing order, then the remaining 11 payments made by standing order ...

The account will then revert to the standard savings account of the day once it reaches maturity.

If you're a personal account holder call 08457 555 555, for the account to be opened and the standing order arrangement set up. You need to be registered for telephone banking (i.e. you MUST have a passcode or password to set up a standing order over the phone).

If you're not registered for telephone banking, then set up the account on the phone, then go into a branch and set up the standing order arrangement. DO NOT transfer funds normally into the account. From my understanding of these "regular payment" style accounts, they will only accept payment by standing order in order for the payment into it to be considered as conforming to the rules for the higher rate of interest.

Other account similar to this had issues if the payment was made by other means, but please don't quote me on that, as this isn't 100% certain on my part.

Good luck, pop pickers!