Regular Savings Accounts

mary

if you have the whole 6 grand now it's possible to put it into an account with lower interest rates but all at once- and still earn more in interest.

Please tell us where?

(note 5 days taken off interest for cash transit)

I'm puzzled - why 5 days, payments take place monthly - therefore not 12?

The combined AER is 6.29%

I thought the average of 7% + 5.65% = 12.65%/2 = 6.32%, or have I got it wrong?

Robert_Sterling_3

You asked why 5 days not 12.
It was 5 days for each of the 12 cheques.

deemy2004

Flaw ?

MOI ?

;D

It is approx right, or do you want me to go over it and oogle out the +/- £2 or £3 ?

deemy2004

Well come on then teach me sometin new ?

I'm looking but my eyes ain't seeing the flaw ?

Please, PLEAASEE , pLeaSe ?

You say flaw in the first calc ?

Month 1 500 £2.88 web saver 5500 £22.15

What Ive done is £500 X .07/365*30 = £2.88
Web saver 5500 X .049/365*30=£22.15

So come on give me the flaw ? Its a £6k abbey account
£500+ £5500 = £6k

come on dude, youve got me looking at the figures looking for a flaw but I can't put any of my fingers on it even the little one that usally works for most flaws is failing to put its point on the flaw.

PLeeeeeeeeeaaaaaaaaaassssssssssseeeeeeeee :-[

Also where I work i.e.Chase De Vere is my business ! :P

deemy2004

Come on dude, post then ?

Ive done my bit to try and get the fact as I see them and calc them to be.

If they are different then I much more want to know the actual facts then be proven right or wrong.

So how much then is the total of a websaver via the halifax current account feeding an abbey monthly saver ?

Robert_Sterling_3

The flaw is this:-

If £2.88 is correct for month one £500 @ 7% p.a. for one month minus five days then month two you would have the first £500 for a month and the second £500 for a month minus five days so that the interest in month two would be more than double the interest in month one.

In fact the £500 paid in month one loses 5 days interest each month for 12 months in your calculation.

In fact in the calculation as a whole you lose 5 days interest 78 times altogether on £500

Once in month one ... twice in month two .... thrice in month three etc etc

Love from Robert.

deemy2004

Hi

Ive not calced it that way. What Ive done is this calced interest at the rate of 360days instead of 365. So thats the 5 days over a year given over to transit time.

So the effective rate of return instead of 7% is 7% / 365 X 360 = 6.90411%

Cheers !

Robert_Sterling_3

You arrive at your £2.88 in month one by using a calculation which assumes that if the annual rate is 7% then the monthly rate is 7% divided by 12 which is 0.583333%
That is the wrong way to work out a monthly rate.
The actual monthly rate is  0.5654145%


A little example
If the annual  rate is 12.68% the monthly rate is actually 1%  not 1.056666%

Each of the monthly figures shown for the 12 months of the halifax build up is wrong.

They start off significantly too high and end up significantly too low.

The monthly figures should not be as yours are
i.e.

Approx

1 times 2.88
2 times 2.88
3 times 2.88

etc etc

Because of various assumptions which you have made they add up to approximately the right answer.

Shinds

Robert,

Maybe you could just do the table again, but ur way

Thanks

Robert_Sterling_3

Consider the fraction

16
64