Fixed Rate vs. Regular Saver

girlpantz

Hi,

I'm thinking of opening a savings account with Santander for about a year. (I've personally never had a problem with Abbey having read numerous threads saying otherwise).

Currently I'm torn between a 1 Yr Fixed @ 3.01% and the First Home Saver account (5% on £5000 + £300/month). I can invest the £10000 required for the 3.01% fixed rate, or ~£8600 for the Home Saver with anything else in another instant access I have elsewhere.

I've never really used regular savers before so all I have gone on is MSE's calculator, but would like somebody to clarify my calculations for me please:

Fixed: £301 interest less tax
Home Saver: (£96.77 + £250) = £346.77 less tax.

Now obviously with the Home Saver, there's no 12 contributions limit, it's variable and pays more interest. Do you guys think this is a good buy?

webwiz

You should add to the Home Saver option the interest you will get on the amount from your £10000 not invested in the Home Saver, this will initially be £5000 reducing by £300 a month to £1400 after a year meaning an average of £3200. If you are getting 2% in the other account this will be about £64 bringing the total to over £400.