Regular savings accounts.....


O

Oral-B

Currently stashing £1,000 a month away in 4.75% Sainsbury Bank Account, put
wondering if instead I should be doing 4 x £250 a month in various regular
savings accounts ranging in AER of 7~10%. I pay tax tax at 40%. How many
of these regular saving accounts make you have a current account as well.
I've already got a Bank Account with Abbey and a Premier Account with A&L,
so no issues there. Looking at Halifax and Ipswich Building Society.

Thoughts anyone?
 
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I

Ian Cornish

Oral-B said:
Currently stashing £1,000 a month away in 4.75% Sainsbury Bank Account, put
wondering if instead I should be doing 4 x £250 a month in various regular
savings accounts ranging in AER of 7~10%. I pay tax tax at 40%. How many
of these regular saving accounts make you have a current account as well.
I've already got a Bank Account with Abbey and a Premier Account with A&L,
so no issues there. Looking at Halifax and Ipswich Building Society.

Thoughts anyone?
I presume you've already maxxed out your ISA allowance?
 
O

Oral-B

Currently stashing £1,000 a month away in 4.75% Sainsbury Bank Account,
I presume you've already maxxed out your ISA allowance?
Yes, that was used on by the 9th April....
 
M

Miss L. Toe

Oral-B said:
Currently stashing £1,000 a month away in 4.75% Sainsbury Bank Account, put
wondering if instead I should be doing 4 x £250 a month in various regular
savings accounts ranging in AER of 7~10%.
Those usually have a maximum amount and time limits etc etc and dont really
seem worth the trouble when you calculate how much extra cash you actually
end up with.
I pay tax tax at 40%.
Then have you given serious thought to Pensions / VCT's etc ?
Or are you going to need the cash sometime soon.

How many
of these regular saving accounts make you have a current account as well.
I've already got a Bank Account with Abbey and a Premier Account with A&L,
so no issues there. Looking at Halifax and Ipswich Building Society.

Thoughts anyone?
Try not to end up with more than 33k in any one place.

http://www.fsa.gov.uk/tables might help find a better home than 4.75 %
 
R

Ronald Raygun

Oral-B said:
Currently stashing £1,000 a month away in 4.75% Sainsbury Bank Account,
put wondering if instead I should be doing 4 x £250 a month in various
regular savings accounts ranging in AER of 7~10%.
Don't be fooled by the high AERs associated with "regular saver" accounts,
they are artificial, and *totally misleading*, a consequence of the
contractual balance profile.

A different savings account which would pay you exactly same amount of
interest if you made exactly the same regular payments, but which is not
marketed as "regular" and therefore doesn't have the same contractual
profile, would have to advertise a much lower AER.
 
M

Marcus Fox

Ronald Raygun said:
Don't be fooled by the high AERs associated with "regular saver" accounts,
they are artificial, and *totally misleading*, a consequence of the
contractual balance profile.

A different savings account which would pay you exactly same amount of
interest if you made exactly the same regular payments, but which is not
marketed as "regular" and therefore doesn't have the same contractual
profile, would have to advertise a much lower AER.
Yes, but presumably you already have the cash in an ordinary savings
account, earning around 5% or whatever the best you can achieve nowadays.
Simply transfer the contractual amount each month from that account into one
paying 7% and you're still a winner at the end of the year than if you'd
left it all in the one paying 5%.

It's not like saying "I have £3,000 under my mattress, what's better,
sticking it in a 5% ordinary savings account or drip feeding it into my 7%
account at £250 a month."

Marcus
 
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G

Gareth

Oral-B said:
Currently stashing £1,000 a month away in 4.75% Sainsbury Bank Account, put
wondering if instead I should be doing 4 x £250 a month in various regular
savings accounts ranging in AER of 7~10%. I pay tax tax at 40%. How many
of these regular saving accounts make you have a current account as well.
I've already got a Bank Account with Abbey and a Premier Account with A&L,
so no issues there. Looking at Halifax and Ipswich Building Society.

Thoughts anyone?
Halifax and Abbey don't require you to have a current account. The
Halifax one automatically starts again after one year which is quite
convenient, although they do transfer the money out into a really low
interest savings account, so make sure you move it from there straight
away.

Another one to look at is Scarborough BS, only pays 6% but 6 > 4.75.

Don't A&L have one that pays 10%?

Gareth.

--
 
T

tim

Miss L. Toe said:
Those usually have a maximum amount and time limits etc etc
Not to mention reverting to a piddly interest rate at the end
of the term.
and dont really
seem worth the trouble when you calculate how much extra cash you actually
end up with.
I agree.

tim
 
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M

me

Gareth said:
Halifax and Abbey don't require you to have a current account. The
Halifax one automatically starts again after one year which is quite
convenient, although they do transfer the money out into a really low
interest savings account, so make sure you move it from there straight
away.
You should be able to choose where it goes with Halifax, mine goes into
a web saver account at the end of the year.
 

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