Is it value paying a £5 payment every month to get the speed?

With rates of interest on financial savings falling throughout most accounts, it’s time to look once more on the 5.12% paying Barclays Wet Day Saver. Will you make extra in your cash, regardless of paying a month-to-month payment and a lower coming to the rate of interest subsequent 12 months? Right here’s what it is advisable to know.

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What’s the Barclays Wet Day Saver

The Wet Day Saver account from Barclays is simply out there to particular present account holders. It’s quick access so you possibly can take your cash out everytime you need, and add extra money as and when.

To get it, you’ll have to both pay additional for the Blue Rewards add on, or have the Premier present account. The latter requires a excessive £75.000 annual wage, so for most individuals entry goes to return through the Blue Rewards package deal which you’ll join with Barclay’s normal present account.

The issue is that this comes with a £5 payment every month. Till late 2024 you would wipe that out with a reward, however that’s sadly gone. So to get the Wet Day Saver you’re a £60 outlay every year – which is able to clearly eat into your annual curiosity.

There are other benefits with Blue Rewards, comparable to free Apple TV+, although if you happen to weren’t already prepared to shell out £5 every month for the streaming service, it’s onerous to justify the payment only for that.

So we’ll assume right here that the £5 cost will come out of your financial savings curiosity.

How a lot does the Wet Day Saver pay?

The headline charge is an honest 5.12% AER. Although for a lot of 2024 that was beatable by free and simpler quick access accounts, these have largely diasappeared, making 5.12% one of many highest paying accounts proper now.

Nevertheless, on 13 February 2025, this may fall to 4.87% AER. That’s nonetheless respectable in comparison with present options, and may show aggressive and close to the highest of the tables if there’s not one other discount.

However there’s one other catch. You’ll solely get this charge on balances of as much as £5,000. Above this the speed drops significantly to 1.16% AER – which is frankly not even value desirous about.

It additionally signifies that if you happen to save the complete £5,000 within the account you’ll really get the gross charge of 5% curiosity (till 13 February 2025, then it’ll be 4.76% gross) as that curiosity can’t compound at the higher rate. Sure technically it’ll be a little bit larger because it’ll earn the decrease 1.16%, however you’re much better off shifting the curiosity elsewhere when it’s paid – I’ll come again to this.

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How a lot curiosity will you earn?

On this first desk I’ve proven what you’ll get in curiosity over a 12 months primarily based on the brand new 4.87% charge, with a second trying on the present 5.12% AER charge. For each tables, desposits of the complete £5,000 have been calculated with the decrease gross charge.

In case you have the Premier present account, or have Blue Rewards however suppose you possibly can justify the £5 payment each month on the opposite restricted advantages, then the second column exhibits the actual return you get.

Nevertheless, if the payment does have to be factored in, I’ve proven what you’ll actually earn after a 12 months, and the efficient rate of interest.

With 4.87% AER charge (assuming full 12 months from 13 February 2025)

Quantity saved Annual Curiosity Curiosity after £60 payment Efficient rate of interest
£500.00 £24.35 -£35.65 -7.13%
£1,000.00 £48.70 -£11.30 -1.13%
£1,500.00 £73.05 £13.05 0.87%
£2,000.00 £97.40 £37.40 1.87%
£2,500.00 £121.75 £61.75 2.47%
£3,000.00 £146.10 £86.10 2.87%
£3,500.00 £170.45 £110.45 3.16%
£4,000.00 £194.80 £134.80 3.37%
£4,500.00 £219.15 £159.15 3.54%
£5,000.00 £238.00* £178.00 3.56%
* 4.76% gross utilized

With 5.12% AER charge (assuming full 12 months regardless of lower on 13 February 2025)

Quantity saved Annual Curiosity Curiosity after £60 payment Efficient rate of interest
£500.00 £25.60 -£34.40 -6.88%
£1,000.00 £51.20 -£8.80 -0.88%
£1,500.00 £76.80 £16.80 1.12%
£2,000.00 £102.40 £42.40 2.12%
£2,500.00 £128.00 £68.00 2.72%
£3,000.00 £153.60 £93.60 3.12%
£3,500.00 £179.20 £119.20 3.41%
£4,000.00 £204.80 £144.80 3.62%
£4,500.00 £230.40 £170.40 3.79%
£5,000.00 £250.00* £190.00 3.80%
*5% gross utilized

As you possibly can see, even with the complete £5,000, you’re solely incomes 3.56% after the payment as soon as the brand new charge is in place. That’s effectively down on the best paying easy access savings rates proper now – and possibly can be for a superb whereas but.

But it surely will get worse if in case you have much less in there. In reality, if in case you have beneath £1,249 for an entire 12 months, you’ll be shedding cash!

Full £5k? What to do along with your curiosity funds

A fast apart right here. If you’re retaining the account, and have the complete £5,000 saved, don’t neglect that when curiosity is paid in every month you received’t be getting the complete 5.12%/4.86% on that curiosity. As a substitute it’s the pitiful 1.16%.

So that you’ll have to take motion every month to make sure that money is getting a greater charge. Very merely, you’ll withdraw the curiosity cost after which switch it to a greater paying account. It’s not a lot admin, and fairly fast to do – although I’d counsel you arrange a reminder in the beginning of the month to do it.

Is the Wet Day Saver value it?

It’s clear lower in case you are solely paying the £5 a month for Blue Rewards to entry the 5.12% paying account. A powerful no. I feel present clients are higher off closing Blue Rewards and shifting their financial savings to an account elsewhere that pays greater than the efficient 3.56% you’re getting (at greatest) with the speed from February. And that’s true even now earlier than the speed lower comes alongside.

Nevertheless, the other is fairly apparent for Premier account holders. On the time of writing there’s just one different quick access account which is able to beat 5% gross, and that’s received related points. With the Santander Edge Saver you’ll get 6% on as much as £4,000 and pay a £3 payment for the required present account (although there’s a hack to keep away from this). So if you happen to don’t fancy that, this the Wet Day Saver is an honest various, or addition.

You’ll wish to look once more in mid-February to see what options are round then, because it may very well be there are extra choices above 4.86%, although I don’t suppose there can be too many.

And for individuals who already subscribe to Apple TV+, and see Blue Rewards as a option to save there, then this financial savings account as an added bonus. Although I’d counsel they appear to see if there are different ways to save on Apple TV+ as a substitute. When you try this, you’ll be again within the boat the place the £5 comes off any earned curiosity.