Halifax regular saver rate
- Thread starter Galway99
- Start date
Keep us posted on this.
If the rate does drop, some people may consider closing their accounts.
Watch out here.
The T&C's of this account are structured so that if you close your account between anniversary dates, or change the monthly contribution, the interest rate drops to the "standard" rate for the whole term since the last anniversary date.
In other words, if the account is closed, you could lose two thirds of the interest you've been accruing at 7% since the last anniversary date of your account.
Adopting alternative strategies could save you a lot of money.
Let's hope the rate will stay at 7%. In the event it does drop, we can talk about what's the best thing to do.
If the rate does drop, some people may consider closing their accounts.
Watch out here.
The T&C's of this account are structured so that if you close your account between anniversary dates, or change the monthly contribution, the interest rate drops to the "standard" rate for the whole term since the last anniversary date.
In other words, if the account is closed, you could lose two thirds of the interest you've been accruing at 7% since the last anniversary date of your account.
Adopting alternative strategies could save you a lot of money.
Let's hope the rate will stay at 7%. In the event it does drop, we can talk about what's the best thing to do.
Still nothing to indicate that the rate is changing...
spinmaster
Registered User
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Any update on this? Is they rate staying 7% indefinitely?
M
mmmmmmmm
Guest
Got a text to say the 7% will be dropping. It said it will be about 5%.
The terms state to be at least 1.5 above the ECB until June 31st 2008.
This means the rate will be at least 5.5%. Unsure to when this will take effect.
About a month ago I got an email to say that all posters with the 7% where to be removed and the new 5.15% account to be put up.
This explains why.
The terms state to be at least 1.5 above the ECB until June 31st 2008.
This means the rate will be at least 5.5%. Unsure to when this will take effect.
About a month ago I got an email to say that all posters with the 7% where to be removed and the new 5.15% account to be put up.
This explains why.
Unfortunately that doesn't seem to be true. There have been some quite savage cuts in interest rates on these accounts. See Halifax website.
To summarise:
First tranche of Monthly Savers (opened prior to 24/10/06)
Rate has fallen from 5.5% to 3%
Second tranche of Monthly Savers (opened between 24/10/06 and 07/10/07)
Rate has fallen from 7% to 4%
Third tranche of Monthly Savers (opened after 07/10/07): rate unchanged
[broken link removed]
I am not aware when these changes happened. Can anyone confirm? Also, can anyone confirm how these revised rates break down in terms of standard and bonus components?
Anyone considering closing their accounts or changing the monthly contribution needs to be aware that they could lose a lot of interest accrued since the last anniversary date of their account.
Under the old rate structure, 4.75% of the 7% interest was a "bonus", only paid if you met certain conditions, such as leaving your account open and not altering the direct debit.
An alternative strategy is to keep the account open, leave the monthly contribution unchanged, but take all money out apart from the €10 minimum balance required to comply with the T&Cs.
You are allowed to make 2 withdrawals a year, so when money builds up again, repeat the process.
Then, when the next anniversary date comes around, take your interest and close the account.
Personally, I got my interest 6 weeks ago, so closing the account fully is probably the best option. I only stand to lose six weeks of bonus interest, and if I leave the account open I'll have to put in €750 a month until next January, which could be getting a better return elsewhere.
I might do a quick calc to confirm
To summarise:
First tranche of Monthly Savers (opened prior to 24/10/06)
Rate has fallen from 5.5% to 3%
Second tranche of Monthly Savers (opened between 24/10/06 and 07/10/07)
Rate has fallen from 7% to 4%
Third tranche of Monthly Savers (opened after 07/10/07): rate unchanged
[broken link removed]
I am not aware when these changes happened. Can anyone confirm? Also, can anyone confirm how these revised rates break down in terms of standard and bonus components?
Anyone considering closing their accounts or changing the monthly contribution needs to be aware that they could lose a lot of interest accrued since the last anniversary date of their account.
Under the old rate structure, 4.75% of the 7% interest was a "bonus", only paid if you met certain conditions, such as leaving your account open and not altering the direct debit.
An alternative strategy is to keep the account open, leave the monthly contribution unchanged, but take all money out apart from the €10 minimum balance required to comply with the T&Cs.
You are allowed to make 2 withdrawals a year, so when money builds up again, repeat the process.
Then, when the next anniversary date comes around, take your interest and close the account.
Personally, I got my interest 6 weeks ago, so closing the account fully is probably the best option. I only stand to lose six weeks of bonus interest, and if I leave the account open I'll have to put in €750 a month until next January, which could be getting a better return elsewhere.
I might do a quick calc to confirm
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These are quite messy to work out, I was fiddling with a spreadsheet there...
It looks to me like you always win if you leave the Regular Saver open but take out the max amount you can and transfer it elsewhere (assuming you have another account paying about 5%).
The nearer you are to your next account anniversary, the more you gain.
Yorky if I assume:
- you had €10K in the account on the last anniversary which was 3 months ago
- this includes your first monthly contribution of the year, which went into your account on the same day as the anniversary
- you contribute €750 per month to the account
- you can earn 5% interest on money you transfer out of the regular saver into a "lump sum account"
Then (all figures gross of DIRT and APPROXIMATE
):(1) Leaving the account open and unchanged you'll get €645 interest over the year
(2) Closing the account now, transferring the balance to the "lump sum account", and paying the monthly contribution to the "lump sum account" instead, you'll get €632 interest over the year
(3) Leaving the account open and continuing to pay the monthly contribution, but transferring €12240 now to the "lump sum" account, you'll get €737 interest over the year.
(4) Doing option three, but transferring a further €3000 out of halifax to the "lump sum account" in four months' time, you'll gain another €12, giving you €749 over the year.
Don't intend doing these figures again but you get the idea
EDIT: just to illustrate how sneaky this condition is though; someone similar to Yorky whose anniversary was 10 months ago would lose almost €500 (gross) by closing outright, i.e. choosing option (2). This is what halifax are hoping you'll do, so don't do it... you have been warned!
Before the rates changed, (so for the last 3 months in your case), the standard rate on this account was 2.25% and the bonus rate was an additional 4.75%.
To earn the bonus interest you have to:
- keep account open for full year between anniversaries
- keep the monthly contribution the same
- make no more than 2 withdrawals
If you don't meet these conditions the rate drops to the "standard" and this will apply from the last anniversary.
So:
If you're going to leave the account open to get the bonus, you need to keep your contribution unchanged until next anniversary.
To earn the bonus interest you have to:
- keep account open for full year between anniversaries
- keep the monthly contribution the same
- make no more than 2 withdrawals
If you don't meet these conditions the rate drops to the "standard" and this will apply from the last anniversary.
So:
No choice here - if you reduce the monthly payment, the 7% you've been earning over the last 3 months goes down to 2.25%.
If you're going to leave the account open to get the bonus, you need to keep your contribution unchanged until next anniversary.
Again, no choice. You can't close the account until the next anniversary, without losing the bonus. So just leave it open, with as little as possible in it!
I have one of the first regular saving a/c's which has dropped from 5.5% to 3% today.
Currently I have about 16000 euro in this a/c. For the 1st year I contributed the max 750 euro and then in the second year I changed this to 10 euro. This kept with all their terms and conditions.
This a/c is due to have its second anniversity mid March(not sure of the exact date).
If I move this to a 5% account now (all except 10 euro) will I get my full 5.5% on the 15990 up to today.
Or should I just wait until the anniversity date in mid March and close the a/c then.
Currently I have about 16000 euro in this a/c. For the 1st year I contributed the max 750 euro and then in the second year I changed this to 10 euro. This kept with all their terms and conditions.
This a/c is due to have its second anniversity mid March(not sure of the exact date).
If I move this to a 5% account now (all except 10 euro) will I get my full 5.5% on the 15990 up to today.
Or should I just wait until the anniversity date in mid March and close the a/c then.
Not too sure what terms apply to the first set of accounts.
If they have similar T&Cs to the second batch of accounts, then you should be able to make two withdrawals per year without affecting the interest you've been accruing at 5.5% on the balance to date.
Check out the docs you got when opening the account, and what they say about conditions for earning the bonus rate of interest.
Yes, for a deposit account those T&Cs are surprisingly sneaky.
Best option seems to be to reduce the monthly payment to the min €10 pm and withdraw all but the min balance from the account. Then close the account on the Anniversary having received the Interest + Bonus Interest. I have the 2nd series of this account (The one which was paying 7% pa up to the change today) and I've confirmed with Halifax that this approach does not break the terms of the bonus interest. This approach again assumes you have a more attractive home for the money that you withdraw and do not deposit in this account going forward.
Thanks that's very interesting... their T&Cs are misleading then, it states (and I quote) "The bonus rate... will be paid... if but only if... all 12 monthly payments in the amounts set out in the application form have been made"