Failed GCE Maths!

verntern

Yes GCE not GCSE. I am of that era! Would appreciate help with a calculation. At present my ISA savings of £47.5k are with the Nationwide eISA at 2.75%. If I transferred the full amount to the Principality Building Society offering 2.8% what would the 0.05% additional interest mean in monetary terms over 12 months? Just wondering if possible transfer delays would make it worthwhile? Thank you for any number crunching!

jamesd

0.05 / 100 * £47500 = £23.75 a year. One day of interest at 2.75% is about 2.75 / 100 * £47500 / 365 = £3.75 a day so that's what you'd be losing for any delays during the transfer process. There's no benefit from doing it in several chunks because each chunk would have the delay.

Dividing by 365 as I did is good enough for day to day calculations but not perfect, particularly for taxable accounts.

verntern

jamesd wrote: »

0.05 / 100 * £47500 = £23.75 a year. One day of interest at 2.75% is about 2.75 / 100 * £47500 / 365 = £3.75 a day so that's what you'd be losing for any delays during the transfer process. There's no benefit from doing it in several chunks because each chunk would have the delay.

Dividing by 365 as I did is good enough for day to day calculations but not perfect, particularly for taxable accounts.

Thank you! An additional £23.75 for the year is certainly not worth the hassle of switching.

no1catman

To make a difference in the % rate you could consider a fixed rate.

I've had a two-year 4% with Leeds for eighteen months now, so I haven't lost out on any increase.

I am about to transfer a couple that are stuck on 0.5% (wish I'd done something earlier), to Halifax fixed term at 4.25%. A bonus with them in that they add the interest from the opening of the account not when the money is transfered.
Moreover if you don't won't to tie your money up for years, why not split it between 2 year, 3 year, & 4 year accounts!?