how do you calculate interest you receive?

Pam00

Hi newbie here,

I have £3000 Isa full etc
so i can put it in natwest regular saver £250 per month @ 4.00% net
or
lump sum in fixed Barclays bond for 1 year @ 2.00% net

How do i calculate interest on both accounts

Thanks

MarkyMarkD

You don't need to.

Firstly, why are you considering a bond paying 2% net for a year?

You can easily get far more than 3% gross (2.4% net).

Secondly, if you've got the lump sum, you need to add the interest you earn on the uninvested part of the lump sum as well as the interest you earn on the invested part in the regular saver.

Very roughly, you will get half a year's interest in each account.

So, if you were getting (say) 3% in an instant access account (gross), 3.75% in a fixed rate bond (gross) or 5% in the regular saver (gross), then the comparison is between:

the average of 3% and 5% = 4% gross if you do the instant access/regular saver combo; or
a simple 3.75% gross if you do the fixed rate bond.

There's not a lot in it. But the regular saver route is a lot more faff.