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    • Seagull27
    • By Seagull27 28th Nov 17, 9:56 AM
    • 577Posts
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    Seagull27
    Could someone please help with this interest calculation (FD Regular Saver maximum)
    • #1
    • 28th Nov 17, 9:56 AM
    Could someone please help with this interest calculation (FD Regular Saver maximum) 28th Nov 17 at 9:56 AM
    Hi all

    I am thinking of switching to FD and as part of my decision I want to know what interest I would earn in a year if I were to use the Regular Saver account to it's maximum. The most you can put in is £300 a month. The interest is 5% AER/gross.

    So if I were to put in £300 a month for a year, at the end of the year what would I have earnt in interest? I have tried to work it out myself but no joy.

    Many thanks

    Max
Page 1
    • Ballard
    • By Ballard 28th Nov 17, 10:03 AM
    • 1,661 Posts
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    Ballard
    • #2
    • 28th Nov 17, 10:03 AM
    • #2
    • 28th Nov 17, 10:03 AM
    There are more accurate calculations but if you just want a ball park figure itís 5% of the rough average balance (£300 x 6) x 5% = £90.

    The FD website probably gives a figure somewhere.
    I got a letter from the government the other day. I opened it and read it. It said they were suckers.
    • AirlieBird
    • By AirlieBird 28th Nov 17, 10:35 AM
    • 742 Posts
    • 524 Thanks
    AirlieBird
    • #3
    • 28th Nov 17, 10:35 AM
    • #3
    • 28th Nov 17, 10:35 AM
    I suggest you look at the Key Product Info

    There are more accurate calculations but if you just want a ball park figure itís 5% of the rough average balance (£300 x 6) x 5% = £90.
    Originally posted by Ballard
    More accurate to multiply by 6.5 rather than 6.
    • Seagull27
    • By Seagull27 28th Nov 17, 10:51 AM
    • 577 Posts
    • 82 Thanks
    Seagull27
    • #4
    • 28th Nov 17, 10:51 AM
    • #4
    • 28th Nov 17, 10:51 AM
    Thanks to both of you, I really appreciate the replies. I didn't see the Key Product Info so thanks for pointing that out as it gives the exact info I needed (£97.50 earnt in the year).

    Cheers
    • colsten
    • By colsten 28th Nov 17, 10:52 AM
    • 8,816 Posts
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    colsten
    • #5
    • 28th Nov 17, 10:52 AM
    • #5
    • 28th Nov 17, 10:52 AM
    https://www.moneysavingexpert.com/savings/best-regular-savings-accounts?&_ga=2.147371319.1693788136.1511731061-1792643167.1435847652#calculator
    • okydoky
    • By okydoky 28th Nov 17, 10:57 AM
    • 221 Posts
    • 20 Thanks
    okydoky
    • #6
    • 28th Nov 17, 10:57 AM
    • #6
    • 28th Nov 17, 10:57 AM
    There is a more general way of doing this -

    Calculate the interest for 1 month, in this case £300 * 5% = £15 divided by 12 = £1.25. Then always multiply this figure by 78, which equals £97.50

    The multiplier of 78 is constant regardless of the monthly payment and interest rate.

    Itís how I do it anyway👍
    • Seagull27
    • By Seagull27 28th Nov 17, 11:00 AM
    • 577 Posts
    • 82 Thanks
    Seagull27
    • #7
    • 28th Nov 17, 11:00 AM
    • #7
    • 28th Nov 17, 11:00 AM
    Thanks for the additional info.

    @okddoky - I'm sure I am missing something blazingly obvious, but what confuses me is that the calc is based on £300. But the account has more than that as the year goes on. I presume that's where the 78 figure comes in somehow?

    I always was more of an arts man at school
    • okydoky
    • By okydoky 28th Nov 17, 11:15 AM
    • 221 Posts
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    okydoky
    • #8
    • 28th Nov 17, 11:15 AM
    • #8
    • 28th Nov 17, 11:15 AM
    Yes, thatís where the multiplier of 78 comes in!

    So month 1 is 1, month 2 is 1 + 2, month 3 is 1 + 2 +3 etc until month 12 gives you the 78.

    This can be used for all combinations of monthly payment and interest rates, saves quite a bit of faffing about, just need to remember 78 and you are sorted👌
    • Seagull27
    • By Seagull27 28th Nov 17, 11:16 AM
    • 577 Posts
    • 82 Thanks
    Seagull27
    • #9
    • 28th Nov 17, 11:16 AM
    • #9
    • 28th Nov 17, 11:16 AM
    Thanks for explaining
    • TrickyDicky101
    • By TrickyDicky101 28th Nov 17, 11:20 AM
    • 2,827 Posts
    • 1,829 Thanks
    TrickyDicky101
    If you want to dip into Excel then the FV function will calculate your future value after a year (this is the same calculation as the calculator linked to in colsten's reply above).

    The 5% is an Annual Equivalent Rate so you need to de-compound for the monthly equivalent:

    (In Excel formula speak):
    =(1+5%)^(1/12)-1
    =0.4074%

    Then the full FV formula is as follows:

    =FV(0.4074%,12,-300,0,1)
    =£3,696.77
    • RG2015
    • By RG2015 28th Nov 17, 11:25 AM
    • 617 Posts
    • 323 Thanks
    RG2015
    And 78/12 = 6.5

    £300 x 5% x 6.5 = £97.50

    £300 x 5% / 12 = £1.25
    £1.25 x 78 = £97.50
    • Seagull27
    • By Seagull27 28th Nov 17, 11:26 AM
    • 577 Posts
    • 82 Thanks
    Seagull27
    Wow - I really am spoilt for choose now!
    • Seagull27
    • By Seagull27 28th Nov 17, 11:54 AM
    • 577 Posts
    • 82 Thanks
    Seagull27
    So, I'm going to apply for an FD account today, but first I am trying to find out whether I would be eligible for the £100 leaving bonus if I apply through MSE. There's no mention of it that I can see on this here MSE website. I've asked over on the main FD thread:

    http://forums.moneysavingexpert.com/showthread.php?t=5580861&page=5

    So if anyone here knows the answer, please head over to that thread and enlighten me!

    Many thanks
    Last edited by Seagull27; 28-11-2017 at 12:18 PM.
    • Ballard
    • By Ballard 28th Nov 17, 6:39 PM
    • 1,661 Posts
    • 1,404 Thanks
    Ballard
    I suggest you look at the Key Product Info



    More accurate to multiply by 6.5 rather than 6.
    Originally posted by AirlieBird
    Yep. Hence my comment that there are more accurate ways to do it. I go for the easiest way of calculating it in my head which gives a close enough answer for my liking. One could always be more accurate by referring to a calandar to work out on which days the funds are to be credited each month.
    I got a letter from the government the other day. I opened it and read it. It said they were suckers.
    • firefox1956
    • By firefox1956 28th Nov 17, 6:48 PM
    • 1,382 Posts
    • 791 Thanks
    firefox1956
    Well you lot are all wrong with your calculations.
    Or First Direct are...........
    My Regular Saver matured a couple of days ago.
    Paid in the £300 every month for a year.
    Received £97.48 interest...............

    HTH
    Last edited by firefox1956; 28-11-2017 at 6:56 PM.
    • YorkshireBoy
    • By YorkshireBoy 28th Nov 17, 6:58 PM
    • 29,616 Posts
    • 17,476 Thanks
    YorkshireBoy
    Well you lot are all wrong with your calculations.
    Or First Direct are...........
    My Regular Saver matured a couple of days ago.
    Paid in the £300 every month for a year.
    Received £97.48 interest...............
    HTH
    Originally posted by firefox1956
    It's impossible to be 'right' unless the start date (and also whether deposits are made on non-working days) is known...for obvious reasons.

    But the 6.5 multiplier is as close as you'll get.
    Last edited by YorkshireBoy; 28-11-2017 at 7:01 PM.
    • TheShape
    • By TheShape 28th Nov 17, 8:47 PM
    • 1,145 Posts
    • 920 Thanks
    TheShape
    TBH, unless there is a very particular reason to know how much the interest will be, and you simply want to compare against another account, it's enough to know that the account pays 5%.
    • Seagull27
    • By Seagull27 29th Nov 17, 11:50 AM
    • 577 Posts
    • 82 Thanks
    Seagull27
    In my case, I wanted to know how much I could potentially earn in a year and then compare it with the £100 you get if you leave FD...
    • RG2015
    • By RG2015 29th Nov 17, 11:58 AM
    • 617 Posts
    • 323 Thanks
    RG2015
    In my case, I wanted to know how much I could potentially earn in a year and then compare it with the £100 you get if you leave FD...
    Originally posted by Seagull27
    What about year 2?
    • Seagull27
    • By Seagull27 29th Nov 17, 12:02 PM
    • 577 Posts
    • 82 Thanks
    Seagull27
    I wouldn't have nearly enough to put in the full whack in year one. So I'd only be getting a much smaller amount of interest than the £97.50/£97.48 [] maximum. In which case, the £100 easily trumps it alone. Much more so if I switch to another bank with an incentive.

    Thanks for the thought though.
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