best savings account for me? and advice!

KipKip_2

i have a loan that i intend to pay off by August 2010 that i unfortunately cannot pay off earlier or make any additional payment (apart from the normal monthly direct debit)

I intend to put money in a savings account from November 09 (after i've paid off the credit card and other bits for the next few months!) of around £500 a month to build up the money to pay this loan off by August 2010.

I would obviously like to put it in somewhere with the best interest rates but seeing as i have always been in debt and never a saver I don't really know how all the interest works? I.e. I have a CASH ISA online with my bank account that said it offers 1.75% AER and that interest is given monthly, so am i right to assume that if i put £500 in November, by December I hsould get interest of £8.75?

would love it if someone can fill me in!!!! thanks :-)

latecomer

Surely the best thing to do would be to overpay as soon as you can rather than put it into a savings account or do yuo mean that you are not allowed to overpay the loan, - only pay it off in full?

Lokolo

KipKip wrote: »

i have a loan that i intend to pay off by August 2010 that i unfortunately cannot pay off earlier or make any additional payment (apart from the normal monthly direct debit)

I intend to put money in a savings account from November 09 (after i've paid off the credit card and other bits for the next few months!) of around £500 a month to build up the money to pay this loan off by August 2010.

I would obviously like to put it in somewhere with the best interest rates but seeing as i have always been in debt and never a saver I don't really know how all the interest works? I.e. I have a CASH ISA online with my bank account that said it offers 1.75% AER and that interest is given monthly, so am i right to assume that if i put £500 in November, by December I hsould get interest of £8.75?

would love it if someone can fill me in!!!! thanks :-)

No. You will get 1/12th of that, each month. Over 1 year you will get £8.75 interest.

Reaper

KipKip - you have posted exactly the same question in 3 forums. Cross posting is not allowed and is a waste of time for those who make the effort to respond.