We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Dissapointed with interest on regular saver
New_to_Budgeting
Posts: 45 Forumite
Hi Guys,
I don't post very often, but had to air my frustration with this.
I started an 8% Regular Saver account with HSBC just under a year ago. Its been hard to save the max. £250 per month and not touch it, but I thought it'd be worth it in the end.............how wrong was I.
I went into HSBC to see if they could tell me roughly how much interest I had acrrued and ir was a measly.........
Guess how much you would expect on £2775 over 1 yr at 8%.......
£60 - How rubbish is that? What else could I have done with my money to make better use ? - ISA was maxed out
I don't post very often, but had to air my frustration with this.
I started an 8% Regular Saver account with HSBC just under a year ago. Its been hard to save the max. £250 per month and not touch it, but I thought it'd be worth it in the end.............how wrong was I.
I went into HSBC to see if they could tell me roughly how much interest I had acrrued and ir was a measly.........
Guess how much you would expect on £2775 over 1 yr at 8%.......
£60 - How rubbish is that? What else could I have done with my money to make better use ? - ISA was maxed out
0
Comments
-
But now you have a nice big lump sum ready for next years ISA allowance or even a bond.In an Acapulco hotel:
The manager has personally passed all the water served here.:rotfl:0 -
But now you have a nice big lump sum ready for next years ISA allowance or even a bond.
Thats how i look at it as well.
If you have an ISA as well. But you are able to put more than £3,000 away each year (£3,600 by april), put it in a regular saver and then at the end of the tax year you can put a big chunk of that money in. Meaning for the next year your ISA monthly payments will be low. So you can put more money into the regular saver.
0 -
New_to_Budgeting wrote: »Hi Guys,
I started an 8% Regular Saver account with HSBC just under a year ago. Its been hard to save the max. £250 per month . . .I.
Guess how much you would expect on £2775 over 1 yr at 8%.......
£60 - How rubbish is that?
After tax, "£2775 over 1 year at 8%" would amount to £177.60. However that is not what you have had in your account for a whole year.
Depending on when exactly you were able to put the money into your account and whether you were able to put in nearer the maximum more recently than earlier, £60 seems not unreasonable. You cannot expect them to pay you interest on money which is not in your account. (That is, for example, you cannot expect £250 paid into an account in August to receive interest as though it had been paid in in October of the previous year.)0 -
New_to_Budgeting wrote: »Hi Guys,
I don't post very often, but had to air my frustration with this.
I started an 8% Regular Saver account with HSBC just under a year ago. Its been hard to save the max. £250 per month and not touch it, but I thought it'd be worth it in the end.............how wrong was I.
I went into HSBC to see if they could tell me roughly how much interest I had acrrued and ir was a measly.........
Guess how much you would expect on £2775 over 1 yr at 8%.......
£60 - How rubbish is that? What else could I have done with my money to make better use ? - ISA was maxed out
My regular saver with HSBC ended up with just over £100 interest,after tax was paid.You have to wait until there is £3000 in there then you get it out on the anniversary of opening.So i think they have underestimated somewhat.
£3,102.36 to be exact!!0 -
Your £3000 (maximum entitled per year) is nt in your Regular Savings Account throughout the year. For the first 6months, you'll have less than half, and vice versa, so work out your interest based on £1500 * 8%, which should be £120 and then allow for tax.
Looks as though you've been given about 4-5%, which you might have got if you've withdrawn the money BEFORE your Regular Savings Account matured, as the banks charge a penalty in the form of loss of maximum interest.0 -
Quote:
Originally Posted by amz84uk
so work out your interest based on £1500 * 8%, which should be £120 and then allow for tax.
... but only if the £250 was deposited on the first of every month. Any later and the amount of interest accruing will be less.
If the 250 was deposited on the first of the month the interest for a year would be £129.99, calculates as follows
6.5/12*3000*.08, this is because the average is not exactly £1500 as the first months deposit increases the average, hence the 6.5/12 calculationChange is here to stay0 -
It doesnt matter what day of the month the payment is made. Interest is calculated daily and the account runs for twelve months closing on the anniversary of its opening. Whatever date it is the first payment is there for 365 days. The second for 335 days etc.
Nigel0 -
It doesnt matter what day of the month the payment is made. Interest is calculated daily and the account runs for twelve months closing on the anniversary of its opening. Whatever date it is the first payment is there for 365 days. The second for 335 days etc.
Nigel
You are quite correct so far as acruing interest is concerned, it is though for the sake of the simple calculation (6.5/12*total ye savings*interest rate) necessary for the payment be made on the first of each month. Otherwise you would need to resort to Excel et al to work the daily balances.Change is here to stay0 -
I put £250pm for 12 months @ 8% into my financial calc and it comes out with £3128.47 which makes it £128.47 interest before tax.
That is consistent with Froglet's figure which is after tax.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.3K Banking & Borrowing
- 254.4K Reduce Debt & Boost Income
- 455.4K Spending & Discounts
- 247.3K Work, Benefits & Business
- 604K Mortgages, Homes & Bills
- 178.4K Life & Family
- 261.5K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards