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  • FIRST POST
    • AndyPK
    • By AndyPK 10th Feb 18, 3:45 PM
    • 2,826Posts
    • 786Thanks
    AndyPK
    Reg. Savers 5%
    • #1
    • 10th Feb 18, 3:45 PM
    Reg. Savers 5% 10th Feb 18 at 3:45 PM
    Well I'm grumpy.

    These regular savers seam to be diminishing either in rate or how much you can put in them.


    Another one in finishing soon and the replacement is only 2.xx%

    I have a santander and nationwide already.

    I may as well stick the money in a 1.4% account.

    I'm pondering HSBC 250 and M&S 250 (earn 81)

    But getting to the point where I wonder if it's worth the trouble. I guess if I include the switching bonus it is.

    Can anyone recommend an account to open, that I can use to sacrifice to get a switching bonus?

    Are there any with nice rates on current accounts ? I have BOS,S123


    Thanks
Page 3
    • YorkshireBoy
    • By YorkshireBoy 11th Feb 18, 12:56 PM
    • 30,147 Posts
    • 17,998 Thanks
    YorkshireBoy
    yes I was just looking at the lloyds website

    2.5% 250 a month
    3% 400 a month (club lloyds customers)

    Could someone tell me what they would earn in a year please, maxed out.

    75 ish ? for the 3%
    35 ish ? for 2%
    Originally posted by AndyPK
    I provided a formula in post #18. Use it? EDIT: I see you have now.
    • AndyPK
    • By AndyPK 11th Feb 18, 1:00 PM
    • 2,826 Posts
    • 786 Thanks
    AndyPK
    using the formula on previous page I get

    78
    40.62


    But these seam too high
    Originally posted by AndyPK

    seam too high though ?
    • AndyPK
    • By AndyPK 11th Feb 18, 1:02 PM
    • 2,826 Posts
    • 786 Thanks
    AndyPK
    using TSB as an example.

    2% 250/month.

    The website says I would earn 28.33

    Your formula suggests 32.50
    • adindas
    • By adindas 11th Feb 18, 1:05 PM
    • 3,528 Posts
    • 2,192 Thanks
    adindas
    yes I was just looking at the lloyds website

    2.5% 250 a month
    3% 400 a month (club lloyds customers)

    Could someone tell me what they would earn in a year please, maxed out.

    1. 75 ish ? for the 3%
    35 ish ? for 2%
    Originally posted by AndyPK
    You could do it yourself using this calcualtor
    https://www.moneysavingexpert.com/savings/best-regular-savings-accounts

    But I have done this for you
    1. After saving 75.00 a month for 1 year and 0 months, you will have 914.56 in savings, meaning you've earned 14.56 interest
    2. After saving 35.00 a month for 1 year and 0 months, you will have 424.54 in savings, meaning you've earned 4.54 interest
    • ValiantSon
    • By ValiantSon 11th Feb 18, 1:07 PM
    • 1,844 Posts
    • 1,705 Thanks
    ValiantSon
    You weren't comparing like with like.

    You said the interest in 3000 for a whole year in the lower interest account is more than the interest on the regular savings account.



    It's true in itself, but the reason for the difference is you are talking about 2 people with different availablity of money.

    Someone who has monthly income gradually increasing their savings should go for the regular savings account, because some of these have the higher interest

    With account availability as they are, someone who has a lump sum already would be best off with decent interest on the lump sum, gradually transferring to higher interest.

    Your remark that the interest is more on 1.4% ordinary than 2.25% regular savings sounded like you were negating that, even if you didn't mean to.

    I don't know why these two numbers are floating around anyway. Higher rates than that are available.

    I don't think anyone mentioned yet that some regular savings accounts have actually increased rates. Bank of Scotland Halifax and Lloyds are all 2.5% for new accounts now (dont know when this started) and the Club Lloyds is 3%, so anyone at Lloyd's could have 2% on the current account and up to 650 a month added at average 2.8%.
    Originally posted by redux
    You interpreted what I wrote to mean something, but that wasn't what I actually wrote.
    • AndyPK
    • By AndyPK 11th Feb 18, 1:08 PM
    • 2,826 Posts
    • 786 Thanks
    AndyPK
    thanks for the calc link.

    It matches the formula on the previous page.

    TSB must be assuming a bit of setup time I guess
    • YorkshireBoy
    • By YorkshireBoy 11th Feb 18, 1:13 PM
    • 30,147 Posts
    • 17,998 Thanks
    YorkshireBoy
    TSB must be assuming a bit of setup time I guess
    Originally posted by AndyPK
    TSB tell you EXACTLY what assumptions they made in order to arrive at that figure, eg opened on 1st March and funded on 25th of each month following.
    • enjoyyourshoes
    • By enjoyyourshoes 11th Feb 18, 1:14 PM
    • 1,061 Posts
    • 1,300 Thanks
    enjoyyourshoes
    Compound interest is interest on interest, so if you have an (APR) interest bearing account, the first years interest has interest applied in the second and subsequent years.

    Therefore the more years you can save without touching the money , the more interest you will make.
    Debt is a symptom, solve the problem.
    • redux
    • By redux 11th Feb 18, 1:25 PM
    • 18,101 Posts
    • 23,881 Thanks
    redux
    You interpreted what I wrote to mean something, but that wasn't what I actually wrote.
    Originally posted by ValiantSon
    This is what you actually wrote:

    It depends what the .xx% is, but if it is 2.25% (as the OP indicates) then yes, 1.4% in an easy access savings account would be better on the total sum than the regular saver would be, e.g. 250 p/m at 2.25% = 36.44, whereas 3000 at 1.4% over 12 months = 42.
    Originally posted by ValiantSon
    As I say, you aren't comparing like with like, as these are different scenarios for the amount available and when, and furthermore the person with the 3000 lump sum at the start could use both accounts to make more than either of those numbers, about 55.

    In other words, you give one hypothetical example which nobody would/should actually follow; it is not better.
    • redux
    • By redux 11th Feb 18, 1:43 PM
    • 18,101 Posts
    • 23,881 Thanks
    redux
    TSB tell you EXACTLY what assumptions they made in order to arrive at that figure, eg opened on 1st March and funded on 25th of each month following.
    Originally posted by YorkshireBoy
    It seems an odd example to specify. More ambitious would be to open the account on the 25th (or even 28th-31st) and make monthly payments on the 1st.

    Edit: that said, if the money is there already, no point waiting until near the end of the month.

    A family member, whom I help with online stuff, has a couple of accounts maturing on Feb 28th. Maybe I need to set a reminder alarm, though I might rephase one to start 2 or 3 months later.
    Last edited by redux; 11-02-2018 at 1:56 PM.
    • redux
    • By redux 11th Feb 18, 2:14 PM
    • 18,101 Posts
    • 23,881 Thanks
    redux
    Compound interest is interest on interest, so if you have an (APR) interest bearing account, the first years interest has interest applied in the second and subsequent years.

    Therefore the more years you can save without touching the money , the more interest you will make.
    Originally posted by enjoyyourshoes
    Whilst this is true, many of these regular savers are now one year fixed term, and interest paid annually, so it doesn't apply.

    For low rates of interest the compounding effect doesn't make a huge difference unless it goes on for many years. But it is there. For example about 50 not about 70 years to double money at 1.4%.

    Someone earlier suggested making a spreadsheet for calculating compound interest, but actually it can be done on simple calculators.

    (1 + x) ^ n, where x is the interest as a decimal fraction, i.e. 0.02 for 2%, so for example 1.02^5 = 1.10408, or 1.07^10 = 1.1967

    Only if there are both an initial sum and regular savings does it get more complicated, and then I use an online monthly savings calculator.
    • polymaff
    • By polymaff 11th Feb 18, 2:46 PM
    • 2,082 Posts
    • 907 Thanks
    polymaff
    using the formula on previous page I get

    78
    40.62


    But these seam too high
    Originally posted by AndyPK
    Figures correct. Remember that, in practice, you'll receive slightly different amounts.
    • polymaff
    • By polymaff 11th Feb 18, 2:56 PM
    • 2,082 Posts
    • 907 Thanks
    polymaff
    using TSB as an example.

    2% 250/month.

    The website says I would earn 28.33

    Your formula suggests 32.50
    Originally posted by AndyPK
    .02 * 250 * 6.5

    equals 32.50

    Again - approximately. Weekends will drive the figure down, force-feeding will drive the figure up.
    • polymaff
    • By polymaff 11th Feb 18, 3:04 PM
    • 2,082 Posts
    • 907 Thanks
    polymaff
    TSB tell you EXACTLY what assumptions they made in order to arrive at that figure, eg opened on 1st March and funded on 25th of each month following.
    Originally posted by YorkshireBoy
    Interesting that they mention the 25th. Yesterday I opened a Club Lloyds RS and the dialogue contained, IIRC, a warning that an initial payment made beyond the 25th would be registered as occurring on the 1st of the next month.

    I wonder if this will be a common approach to avoiding the variable month length issue?
    Last edited by polymaff; 11-02-2018 at 3:07 PM.
    • YorkshireBoy
    • By YorkshireBoy 11th Feb 18, 4:17 PM
    • 30,147 Posts
    • 17,998 Thanks
    YorkshireBoy
    Interesting that they mention the 25th.
    Originally posted by polymaff
    I suspect it's a relic from the LloydsTSB days.
    Yesterday I opened a Club Lloyds RS and the dialogue contained, IIRC, a warning that an initial payment made beyond the 25th would be registered as occurring on the 1st of the next month.
    I don't remember seeing that when I've opened mine at the end of the month. My current RS was opened and funded on the 28th IIRC. They do say that the SOs have to hit by the 25th, but as far as I know you can fund initially by internal transfer on the last day of the calendar month, provided it's a bank working day of course.
    Last edited by YorkshireBoy; 11-02-2018 at 4:53 PM.
    • polymaff
    • By polymaff 11th Feb 18, 4:51 PM
    • 2,082 Posts
    • 907 Thanks
    polymaff
    I don't remember seeing that when I've opened mine at the end of the month. My current RS was opened and funded on the 28th IIRC. They do say that the SOs have to hit by the 25th, but as far as I know you can fund initially by internal transfer on the last calendar month, provided it's a bank working day of course.
    Originally posted by YorkshireBoy
    I didn't pay much heed, it being the 10th, but what you mention about SOs rings a bell - and it may well be a way of them trying to sort out the end-of-the-month issue. Incidentally, I "force-fed" the just-closed Club Lloyds RS and they accepted the SO being dragged forward to the 1st of the month and the resulting 13th deposit - and paid the extra interest.

    Not like those baskets at HSBC
    • Eco Miser
    • By Eco Miser 11th Feb 18, 5:23 PM
    • 3,444 Posts
    • 3,234 Thanks
    Eco Miser
    It depends what the .xx% is, but if it is 2.25% (as the OP indicates) then yes, 1.4% in an easy access savings account would be better on the total sum than the regular saver would be, e.g. 250 p/m at 2.25% = 36.44, whereas 3000 at 1.4% over 12 months = 42.
    Originally posted by ValiantSon
    But not better than the combined interest of the increasing sum in the regular saver and the decreasing sum in the easy access savings account as 250 is moved over each month.

    Nor is 1.4% better than 2.25% on any specified sum. (I didn't mention any amounts, just rates; and you decided to create your own scenario, comparing the rates on different amounts.)
    Eco Miser
    Saving money for well over half a century
    • Ledw
    • By Ledw 11th Feb 18, 5:56 PM
    • 1 Posts
    • 0 Thanks
    Ledw
    confusion over %
    I'm no expert with mathematics but HSBC are offering a Regular Savers account with a fixed rate of 5% over 12months when you are a premier account holder. To me this means that at the end of 12months the interest on the maximum amount of 3000 is 150- but HSBC are telling me that the interest received will be 81.25... this is 2.7% not 5%.

    Am I working the % out incorrectly? is there something I'm missing?- what has your experience been?
    • YorkshireBoy
    • By YorkshireBoy 11th Feb 18, 6:05 PM
    • 30,147 Posts
    • 17,998 Thanks
    YorkshireBoy
    I'm no expert with mathematics but HSBC are offering a Regular Savers account with a fixed rate of 5% over 12months when you are a premier account holder. To me this means that at the end of 12months the interest on the maximum amount of 3000 is 150- but HSBC are telling me that the interest received will be 81.25... this is 2.7% not 5%.

    Am I working the % out incorrectly? is there something I'm missing?- what has your experience been?
    Originally posted by Ledw
    See post #18.
    • polymaff
    • By polymaff 11th Feb 18, 6:25 PM
    • 2,082 Posts
    • 907 Thanks
    polymaff
    I'm no expert with mathematics but HSBC are offering a Regular Savers account with a fixed rate of 5% over 12months when you are a premier account holder. To me this means that at the end of 12months the interest on the maximum amount of 3000 is 150- but HSBC are telling me that the interest received will be 81.25... this is 2.7% not 5%.

    Am I working the % out incorrectly? is there something I'm missing?- what has your experience been?
    Originally posted by Ledw
    See many of the previous posts in this thread !

    .05 * 250 * 6.5 = 81.25

    EDIT: Incidentally you can also get this account as an Advance account holder.
    Last edited by polymaff; 11-02-2018 at 6:31 PM.
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