10% interest rate on regular savings.

dozey_rosey

Hi Everyone,

I'm new to this site so I hope I'm in the correct department plus, if I receive any replies I hope I can retrieve them.

Question: I've read on this site about the A & L regular savings account and the Halifax children's savings account offering a 10% rate of interest. Please correct me if I'm wrong but, doesn't that work out to the equivalent of just 5.5% pa on a lump sum invested for 1 year (doesn't sound so good after all)?

Dozey.

innovate

Not so dozey-rosey (!), welcome to MSE and you are pretty much right - see this article , and always compare APRs. However, 5.5% APR before tax ain't exactly bad, and it's certainly a good option for a higher rate tax payer who has already maxed out their ISA allowance and doesn't like risks.

grumbler

... and with regard to lump sum read my post #9 in the discussion ...

tomstickland

Please correct me if I'm wrong but, doesn't that work out to the equivalent of just 5.5% pa on a lump sum invested for 1 year (doesn't sound so good after all)?

If you move the £3K from a 5% payer (in £250 chunks) then it works out at an equivalent of around 7.5% over the year. Which is better than most ISAs even after tax.

Comparing like with like, if you invest £3000 into a 5% payer in £250 pcm chunks that works out at about 2.5% rate.