Please confirm my calculations are correct.

Aegis

TRUSt_NO_1 wrote: »

ME AGAIN....Without reading all the thread as I can't be bothered,surely it's as simple as putting as much money into the highest interest bearing account as possible ?

Regular savers don't allow you to make lump-sum deposits, and this situation is further complicated by Halifax's increased rates on the regular saver for using their lump-sum savings product as well.

It's not simply a matter of picking the highest single rate, there are a lot of factors to account for here.

jamieslucky7

TRUSt_NO_1 wrote: »

ME AGAIN....Without reading all the thread as I can't be bothered,surely it's as simple as putting as much money into the highest interest bearing account as possible ?

Sounds like you didn't even bother reading the first post!


Using the BM calculator they tell me I will earn £924.30. However the moneysavingexpert calculator tells me I will only earn £739. Are BM trying to rope me in by lying to me about potential interest earned?

DeepSporran

jamieslucky7 wrote: »

Using the BM calculator they tell me I will earn £924.30. However the moneysavingexpert calculator tells me I will only earn £739. Are BM trying to rope me in by lying to me about potential interest earned?

Take off tax at 20%.

Jake'sGran

TRUSt_NO_1 wrote: »

If access to your money was not to be considered... and you had £500 to invest,would you put it into an account that got 8% interest or one that got 12% interest?

Are both of these monthly saver accounts? I believe lots of people are confused by them and wasn't surprised to see yet another letter in the Question of Money column (by Diana Wright) in the Sunday Times last week when a reader had complained about the small amount of interest she got at the end of the year in her monthly saver A/c. To most people it will be obvious that you are not going to received 12% of the end of year total
but for those who don't realise how it works I think there should be a clear example in the adds I see in the financial pages.

chopperharris

banks should be dragged over the coals for the blatant advertising lies , its meant to mislead the saver on purpose.Joe q thinks oh the advertised percent whatever on all my money , common enough misconception is it not?

it would be easiest said that these accounts realistically dont give what they say , ie the 12 or 8 percent aer isnt entirely true.One of the math savvy folk will have already done a chart on exactly why somewhere on here.

The gist of it-:You are CAPPED at what you can pay in , if thats true only the first payment is really getting the advertised aer , each one after the interest is reduced by 1/12 of the advertised rate.

By capped payment I mean of course max £ allowed in every month.Its even worse if your capped by the account where the money can be paid in from , usually an account with the same people with poor interest already....aka a tie in.

if you already have a lump , and its being drip fed into these accounts anyway , your in all honesty better off with a 12 month savings bond.Its covered just the same as an savings account ie up to 35k per institution , unless its a euro bank passport scheme thingymabobjings.

The difference between them is the saving bond where the whole lump sum gets the rate advertised , not just the innital amount.Theres good deals on 7 percent just now in several places.... if you dont need the money for anything soon go on do it.

YorkshireBoy

chopperharris wrote: »

if you already have a lump , and its being drip fed into these accounts anyway , your in all honesty better off with a 12 month savings bond.

It's all down to personal choice really. You may be happy with a 7% 12 month bond. Others may want the 9%+ aggregate available from some drip-feed/regular saver combinations.

I know which I'd rather have!

londonman81

Am I right in thinking that the Halifax Guaranteed Saver + 12% Regular Saver combination equates to only around 5.06% (on 11k max, after tax), while a one year Bradford & Bingley 7% bond gives 5.60% (on any amount upto £2m, after tax)??

For someone with large sums of cash there is surely no point in the Halifax offers?

sloughflint

londonman81 wrote: »

Am I right in thinking that the Halifax Guaranteed Saver + 12% Regular Saver combination equates to only around 5.06% (on 11k max, after tax), while a one year Bradford & Bingley 7% bond gives 5.60% (on any amount upto £2m, after tax)??

For someone with large sums of cash there is surely no point in the Halifax offers?

No equates to 8.01%:
£5k ----> 5000*0.0625= £312.50
£6k

---

>6000*( 5.5*6.5+6.5*12)/1200=£568.75
£ 881.25 gross ie 8.01% or £ 705 net

[strike] I hadn't read the first few posts and now wonder why the slight difference with post 2?[/strike] Different amounts.

londonman81

No equates to 8.01%. I'll double check my calculations:
£5k ----> 5000*0.0625= £312.50
£6k

---

>6000*( 5.5*6.5+6.5*12)/1200=£568.75
£ 881.25 gross ie 8.01%

not sure i follow your second line of calculations...

Is it not (1.12^(1/12)-1)*Amount , applied each month?

i.e:

Month 1 interest: 500 * ((1.12)^(1/12)-1)

Month 2 interest: (500+ Month 1 total value) * (1.12^(1/12)-1)

Month 3 interest: (500 + Month 2 total value)*(1.12^(1/12)-1)

etc

Then adding up these monthly interest across 12 months to give the actual interest payment due at end of 1-year term.

YorkshireBoy

londonman81 wrote: »

not sure i follow your second line of calculations...

Drip feed account interest:

£6,000 x 6.5% / 12 x 5.5 = £178.75

Reg Saver interest:

£6,000 x 12% / 12 x 6.5 = £390.00

Total interest = £568.75