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Posted 2 days ago

Regular Saver 7% Interest From Dec 1st, Current Account Required (Min £25/Max £300 Per Month/ For 12 months + No Withdrawals) @ First Direct

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Shared by tonyawesome69
Joined in 2019
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About this deal

First Direct doubles interest on regular saver to 7%

MSE article for further info:
moneysavingexpert.com/news/2022/11/first-direct-regular-saver-interest-rate-doubled/?utm_source=twitter&utm_medium=social&utm_campaign=news&source=TWORG-NEWS&utm_content=

Here are the key need-to-knows:
You'll need to have a First Direct current account. If you already bank with First Direct, you can open the regular saver online* – apply now and you'll get the new rate from 1 December. If you're new to First Direct, the good news is it's currently paying newbies £175 to switch (see below for more on this).


The account lasts for a year from when you open it and the 7% rate is fixed for this period. Your interest will be paid in a lump sum when the account matures.


You can only deposit £25 to £300 a month. Your first payment will be taken from your First Direct current account when you open your account, followed by another 11 monthly payments which can only be made by standing order (First Direct will set this up for you).


You CAN'T skip months. To keep the account, you have to deposit at least £25 a month for the 12-month duration.


There are NO withdrawals allowed. You can access your money before the year is up, but you'll have to close the account. If you do so, you'll only get interest equivalent to First Direct's bog-standard easy-access account (which currently pays 0.5%).
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  1. Avatar
    Whats the highest interest payment you will earn on this with £300 a month deposit? (edited)
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    £136.50

    The 7% interest is per year, so that's 0.583% per month. It's calculated daily but paid annually, so you only get interest on your actual balance (the interest doesn't compound).

    So because you can only put £300 per month you will only earn the full 7% on the first £300 you put in. The second £300 deposit will only earn interest for 11 of the 12 months, so that's 11/12ths of 7% or 6.416%, your third £300 deposit will only earn interest for 10 of the 12 months, and so on until the last month where you'll have £3600 but only gain 0.583% on that.

    The breakdown looks like this

    Month 1 - Total - £300; Gain £1.75 interest
    Month 2 - Total - £600; Gain £3.50 interest
    Month 3 - Total - £900; Gain £5.25 interest
    Month 4 - Total - £1200; Gain £7 interest
    Month 5 - Total - £1500; Gain £8.75 interest
    Month 6 - Total - £1800; Gain £10.50 interest
    Month 7 - Total - £2100; Gain £12.25 interest
    Month 8 - Total - £2400; Gain £14 interest
    Month 9 - Total - £2700; Gain £15.75 interest
    Month 10 - Total - £3000; Gain £17.50 interest
    Month 11 - Total - £3300; Gain £19.25 interest
    Month 12 - Total - £3600; Gain £21 interest
  2. Avatar
    This is a good deal for regular savers. However, its the same as putting £3,600 into a fixed account paying 3.61% interest.
    There are 1 year fixed that pay up to 4.35% (edited)
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    Well it's not though, is it? If you had £3,600 upfront then agreed, this deal maybe isn't for you. Most people don't have that though, so if they only have £300 a month to be able to put away, possibly starting from now, then this is a cracking deal
  3. Avatar
    I wonder if this applies to existing regular savers account holders??
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    Author
    According to MSE, existing regular saver will get automatically increased to 7%

    48873207_1.jpg (edited)
  4. Avatar
    What’s the catches?
    Avatar
    Author
    From the MSE article (link in the description)

    48873176-n27gB.jpg
  5. Avatar
    7% = WOW
    Max £300 a month = not so WOW

    Good headline rate but terrible monthly input rate... i needs this 7% on 30K :-)
    Avatar
    Stick it in Premium Bonds (I had a £5k return this month )
  6. Avatar
    If you think about it, the effective rate can be around 5%, if you start with £3,600 in a top easy-access savings account such as Atom's easy access account, and siphon the money each month.

    See worked example below.

    If you have a 5.12% Barclays rainy day saver, the effective interest would be 6.14%!
    48880131-J5Imn.jpg (edited)
  7. Avatar
    Not an ethical bank.

    First Direct is part of HSBC, which has financed $115 billion to expanding fossil fuels since 2016.
    That might be part of why they can give this rate!

    tinyecohomelife.com/mos…-uk
    "Two of the worst UK culprits are Barclays, who have provided $145 billion worth of fossil fuel funding, and HSBC who have financed $115 billion."
    Avatar
  8. Avatar
    Is there any bank besides Barclays where you can just chuck the lump sum in and get a decent rate without having to pay in monthly??
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    What rate are you getting from Barclays? My impression of them has been a 'good for nothing' bank. I.e some banks are better for ISAs, some for fixed rate savings, some for mortgages etc. Barclays in my view have been terrible for everything so interested on what services you have with them.

    My lump sum savings are currently on zopa - 2.8% for 90 days fixed. ISA is with Santander at 3% 1 year fixed
  9. Avatar
    [deleted]
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    I agree. Using their online banking is like going back in time 20 years. They even have everything in black and white, retro theme to match the retro service

    However there is nothing stopping you banking elsewhere and just holding an account with them to take advantage of the higher regular savings rates.
  10. Avatar
    Inflation is running at around 11% now

    7% is still a loss in real terms
    Avatar
    Lol, you aren’t supposed to profit from bank interest rates. It’s just a bonus if you aren’t willing to take a gamble on investments.
  11. Avatar
    all these reg saver accounts get max super heat, in reality is no diff to the £150 incentive for current accounts.
    The saver is maxed to 300 per months, so even if u save max allowed that’s 3600 averaged over 12 months at 7% = £126. Yet u have to lock your money in. Once the year is over the rate falls like crazy.
    If you are going to fill an application just fill one for a current account u get more money instantly as an incentive and u don’t have to lock your money into a saver
    Avatar
    Which accounts would you suggest where you don’t have to lock your money away please? The best I can find is Atom at 4.35%, but you have to lock away for a year. The Barclays account you have to pay for, so any other suggestions are appreciated.
  12. Avatar
    So the absolute max is 252 pound in interest you could earn during the year?
    Avatar
    Don't forget that you could start with £3,600 in an easy access saver and siphon £300 month from that into First Direct, so you'd earn interest on both accounts.
  13. Avatar
    7% on £300 a month lol waste of time
  14. Avatar
    Can I open a current account and not use it, to access this?
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    When I opened mine a few years ago, there was a £10 a month charge if I didn't deposit a certain amount a month into the account, I managed to get around this by applying for a credit card (which I never use) and by having the credit card they then waive the monthly charge for the current account - not sure if this is still the case.
  15. Avatar
    I was just try to work out exactly how much will be the interest after putting in the £300 max a month so thanks for that.

    I think its good for someone who just want to start saving. If you already have £3600 and want to put this in for some good interest 5 % will give you £180 in interest. I persoanly never been a fan of them regular savers as they always have £200-£300 maximum pay in per month making them after 12 months not as good as other savings accounts for 12 months
  16. Avatar
    I opened this account months ago when the rate was 3.5%. I think the updated rate will be applicable to existing accounts too but Is it better to keep the existing account or open a new one with increased rate?
    Avatar
    The rate increase will also apply to existing accounts.
    I'm in the same situation as you and I've just received a text saying the rate will increase from 1st December
  17. Avatar
    So, if you save the max £300 per month. It averages at 7% on £1800 assuming no withdrawls or skipped months etc.etc.

    The rest of your savings will accrue 0.5%
    Avatar
    Wow you make it complicated, you get just over half ie 3.5% over the year.
  18. Avatar
    If you open a joint current account, can you open 2 regular saving accounts (1 for each individual?)
  19. Avatar
    When I open a link,interest rate shown was 3.5% not 7%. Am I missing g something??
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    The date, 1st December.
  20. Avatar
    So much hassle for £126?
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    Takes a few minutes to sign up and set up a standing order.
  21. Avatar
    Says 3.5% for me ???
    Avatar
    Author
    Look at the title, starts on the 1st Dec
  22. Avatar
    I hate all these banks that only give X% on "up to the first £<small number> K", or only allow "<small number> per month paying in" limitations.
    What happened to the proper days of banking when they said we'll give you X% on your entire balance?

    If you put the max of £300 per month in this, you'll get about £136 interest at most after the year.

    Not to be sniffed at, I know, but it's disgraceful the way they're allowed to put limitations and restrictions on the interest they give back for our! money.

    Interest rates should be for the entire balance. After all, when they want to add interest on the mortgage amount, it's on the whole lot, isn't it? Treating interest in whichever way favours them, rather than equally.
    It's not like they're ever gonna turn around and say, oh the money we leant you for your mortgage, we'll only charge you interest on "up to the first £<small number> K".

    When they lend you money, they want interest on everything.
    When you give them your money, (which they'll use to earn millions for themselves), they put up so many restrictions and limitations that we're supposed to be happy to get just a few pounds back in interest.

    Sorry, rant over.
  23. Avatar
    Glad they're increasing to people who already have the saver.
  24. Avatar
    woah. Heat added
  25. Avatar
    Thats a result, We have 2 running and I was thinking about ending them and sticking the cash in my ISA at 4.4%.
    Will hold off now. (edited)
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    If you can put a lump sum in at 4.4% it may well earn more than this. I've not done the maths but you should check
  26. Avatar
    I assume that existing customers will get the automatic increase
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    Yes. You don't need to do anything but put money in from 1st Dec.
  27. Avatar
    Nice, message from first direct telling me it will be 7% for the remaining 6 months of my saver. Good to get it as a customer that already agreed to a fixed rate at half that.
  28. Avatar
    The website still has the current rate and says 'if you save £300 every month for 12 months and qualify for the 3.50% AER/Gross p.a. interest rate, you'll earn approximately £68.25 interest' so it'll be double that at 7% - £136.50
    Avatar
    You will have to pay tax on it it too
  29. Avatar
    Funnily enough, I've just got a text from FD communicating this rate increase as I was reading the comments here.

    48877275-IP6Ol.jpg
    Avatar
    I got this too it made my day, it certainly helps with the current inflation, it's not a savior mind you but it's better than just losing money to inflation without taking risks in stocks
  30. Avatar
    Effective rate of 3.75% over the year.
    Avatar
    Ahh, still not bad but I guess there are some one year fixed terms worth a little more
  31. Avatar
    I must be missing why this has so much heat. Even if you've got the "full" £3600 to put into this account (and you need a First Direct current account already), you'd get better returns putting your cash into somewhere with 3.5% interest or better, right?

    Looks good at first glance, then you realise there are better options out there.
  32. Avatar
    I don't get why some people struggle with regular savers. You will earn 7% on all money in the account. They won't give any intetest on money you intend to deposit in the future, until it's in the account. And 7% is currently an excellent rate. What's so difficult about it?
    Avatar
    If you understand how much your money will be at end of one year.
    So effectively your is not more than 3.79 %
    Read about recurring Deposit on Google (edited)
  33. Avatar
    Thanks op
  34. Avatar
    Is this stated by First Direct anywhere else? MSE is the only source of this change in interest rate and can't see any press release or social media post about it by FD
    Avatar
    Author
    I haven't seen anything directly from FD yet but MSE is a reputable source and I doubt they would post officially if it wasn't verified. They would have added a disclaimer if they weren't sure.
  35. Avatar
    Just been advised if you currently have a regularly saver no need to close and open a new one the 7% is being back dated to you current running regularl saver bargain
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    where is that stated - It states once your account is opened the rate will remain fixed! I guess will have to apply on/after 1st Dec
  36. Avatar
    This is good, but - if you have £3600 in a 3.5% account it will return the same!

    The best 1 year account is 4.35% .... so, this is only any good if you can only filter £3600 in over a year.
  37. Avatar
    7% interest sounds great on paper. In reality, if you top up £300 every month, you'll have about £137 extra at the end of 12 months. OK for people who save bit by bit, but you would expect more considering is 7%. People who already have some savings, will be better of with other bank accounts. I think it deserves some heat.
  38. Avatar
    Remember that inflation is 11%. So overall the money in this account devalues by 4%.

    You'll gain jack in real terms.
    Avatar
    Inflation is more like 20% and more. Government figures are cooked. If they used the formula from past decades it would be over 20%
  39. Avatar
    Is it just me or are all these deals completely pointless with such small amounts involved?
    Avatar
    Better than leaving the money under ya mattress. But obvs u can get higher rates if u invest it elsewhere but comes with risks.
    Nothing new really. Rates are always low on safe money.
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