Lloyds TSB instant access monthly saver 8%

Milarky

Yes, it was raised here by amy21 a few days back. But thanks for linking to the Times article - our first hard detailed look.

Have just done some sums based on the Times article info.

FIRST YEAR: Opening credit of £750 and 11 payment of 250 monthly thereafter. Average balance in account £2125 and interest payable 8 percent gross of this : £170 (£136 for basic, £102 for higher rate taxpayer)

SECOND YEAR: Opening balance of £3670 (non taxpayer), £3636 (20%) or £3602 (40%). Added to this is the average balance for 12 monthly payments of £250, starting on the 1st anniversary: £1625. So that's 8 percent of either £5295 (non taxpayer), £5261 (20%) or £5227 (40%): £423.60, £420.88 gross/£337.34 net (20%) or £418.16 gross/£250.90 net (40%)

[The times gives a final figure of '£7095' possible which equates to gross interest of £595 - for a non taxpayer I assume. I work the same thing out as £170+£423.60 or £593.60]

If you assume that there is an initial 'pot' of the total paid in over two years (£6500 max) in a 'feeder' account paying the Bank of England rate of 4.5% and that rate is also fixed for two years then the 'blended rate' of interest on the whole sum can be estimated:

FIRST YEAR: Total £6500, average in LTSB RS £2125, therefore average balance of feeder £6500-£2125 or £4375. Gross interest (same for everybody): 4.50% x £4375 or £196.88

SECOND YEAR: variable opening balance in feeder of £3196.88, £3157.50 (basic rate) or £3118.13 (HR taxpayer). Average moved to LTSB RS in year £1625, so Gross interest based on a balance in feeder of £1571.88, £1532.50 (basic rate) or £1493.13 (HR taxpayer). That is £70.73, £68.96 gross/£55.17 net (20%) or £67.19 gross/£40.31 net (40%).

Combined:..........................Year 1..............................Year 2

Non taxpayer
LTSB..................................£170.00..........................£423.60
Feeder................................£196.88...........................£70.73
Total (a).............................£366.88..........................£494.33
Balance (b)........................£6500.00........................£6866.88
(a)/(b)..................................5.64%.........................7.20%

Basic rate
LTSB..................................£170.00..........................£420.88
Feeder................................£196.88...........................£68.96
Total (a).............................£366.88..........................£489.84
Balance (b)........................£6500.00........................£6793.50
(a)/(b)..................................5.64%.........................7.21%

Higher rate
LTSB..................................£170.00..........................£418.16
Feeder................................£196.88...........................£67.19
Total (a).............................£366.88..........................£485.35
Balance (b)........................£6500.00........................£6720.13
(a)/(b)..................................5.64%.........................7.22%

anticlaus105

Looks like it's time to switch my buisness from A+L to Lloyd's.

Sillychuckie

hmm. Can I afford 3 reg savers.
Will do my best... when can we apply?
gimme gimme gimme!

EDIT: AH, available tomorrow. Yippeee

mary

Milarky wrote:

FIRST YEAR: Opening credit of £750 and 11 payment of 250 monthly thereafter. Average balance in account £2125 and interest payable 8 percent gross of this : £170 (£136 for basic, £102 for higher rate taxpayer)

How do you make the average £2125? I thought half of £3,500 was £1,750?

grumbler

mary wrote:

How do you make the average £2125? I thought half of £3,500 was £1,750?

Starting balance - £750
Final balance - £3500
Average balance - (£750+£3500)/2=£2125

mary

It's probably me being thick but at the end of year one, you have £3,500, not £750 + £3500. Surely you see what's in the account at the end of the first year and then simply divide by 2 to get the average?

grumbler

mary wrote:

It's probably me being thick but at the end of year one, you have £3,500, not £750 + £3500. Surely you see what's in the account at the end of the first year and then simply divide by 2 to get the average?

Well, if you have £100 at the start and £100 at the end, what is the average? £100/2=£50? Or maybe (£100+£100)/2=£100? I think the latter rather than the former.

£3500/2 works only if the starting balance is £0 and then you add £250 in the middle of every month.

If this is still not clear, take a calculator and calculate
(750*12+250*11+250*10+...+250*1)/12=....

Robert_Sterling

mary wrote:

How do you make the average £2125? I thought half of £3,500 was £1,750?

You are correct when you say that half of £3500 is £1750
But another poster is also right when he states that the average amount in the account is £2125.

All miss out the next bit if you do not like algebra

Let the amount placed in the account at the begining of month one be x
Let the amount placed in the account in each following month be y

So in month 1 there is ..x ............in the account
.................2 ............ x + y in the account
etc etc etc 3 ........... x +2y
................ 4 ........... x + 3y

etc etc

So in month 12 there is x + 11y .....in the account

Add these 12 amounts and you will get 12x + 66y

Divide by 12 and you will get x + 5.5y as the average amount

But in our example x = 750 and y = 250

So the average amount in the account is .......750 + 5.5 X 250
...............................................................750 + 1375
........................................................................2125
Q.E.D.

Mathematics ... The Subject that counts.

Prudent

I am simply hopeless at maths and can't follow all of the above. However the concensus seems to be its a good rate. I have a current acount with Lloyds - how do I apply for this? I looked online this morning and couldn't see anything. Do I need to go into a branch?

jackieblue

I've just opened this one. Not available yet on-line. You have to do it over the phone or at a branch. The Times article gave opening balance of £750. This morning they said the opening limit is £500, so I'd be interested to hear what others' experience is. Many thanks.