How much can you save?

System

newsaverr wrote: »

Maybe a daft question but i'm new to this. if savings offer 5% p.a what will i get a month? i'm looking at some long term accounts and short term so i've got a spare 'pot' and a rainy day 'pot. just trying to work out what i can earn a month or year. any clues anyone?

around 0.004% per month

so if you have £10000 to save, multiply this by 0.004 which gives £40 per month. I think thats right :money:

Chargem

newsaverr wrote: »

Maybe a daft question but i'm new to this. if savings offer 5% p.a what will i get a month? i'm looking at some long term accounts and short term so i've got a spare 'pot' and a rainy day 'pot. just trying to work out what i can earn a month or year. any clues anyone?

Step 1: work out how much interest you would get in a year. E.g. 5% per annum on £1000 in the bank is £50 in interest for the year. To do this on a calculator divide the interest rate (5) by 100 and then times that by the amount you have in the account (5 / 100) x 1000.

Step 2: divide the annual interest by 12. This gives the amount per month. £50 divided by 12 is £4.16 (some months will be £4.17 because of rounding)

Zekko

newsaverr wrote: »

Maybe a daft question but i'm new to this. if savings offer 5% p.a what will i get a month? i'm looking at some long term accounts and short term so i've got a spare 'pot' and a rainy day 'pot. just trying to work out what i can earn a month or year. any clues anyone?

On an account paying 5% , for every £1000, averaged over the months it works out as £3.33/month (basic rate taxpayer), or £2.5/month (higher rate tax payer).

chocaholicmanc

newsaverr wrote: »

Maybe a daft question but i'm new to this. if savings offer 5% p.a what will i get a month? i'm looking at some long term accounts and short term so i've got a spare 'pot' and a rainy day 'pot. just trying to work out what i can earn a month or year. any clues anyone?

To make things slightly more complicated it depends whether the interest is 'simple' or 'compound'. simple interest is only paid on the amount invested (so if you put £1000 in an account at month 1 you would only receive interest each month on that £1000). Compound interest is paid on the total amount. If you invested £1000 and received £50 interest in month 1 then in month 2 the interest would be calculated on £1050.

Perhaps not a massive amount if you are only investing a small sum but the bigger the initial investment the more interest you lose if it's calculated as simple interest!

dippykitty

Haven't posted here for ages! I'm now just over the £11k mark (need to update my sig) but I'll some coming out soon for a holiday and possibly for new glasses. Things haven't been moving as much as I'd like this year due to decreased income

bsisonu

In Pakistan interest:beer: rate is over 10.5%. so invest your money in the national savings certificates and get more money than anywhere

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Kutierezharyi

Well, Guys I am new member here and i am a SEO executive and got the job just couple of month ago so I have not saved much but feeling good to be here. Your posts also encouraged me for saving money..thanks:)

nat21luv

End of month update from me,

£2562/£4000

Only managed to put £350 away this month, hoping for more next month as I have students again.

Kutierezharyi

Well friends do me one favor, actually I don't know why I am not able to save money.I spend all over the month and get out of pocket by the end of month..So, can you guys suggest me some money saving skills that you people have?

Leahcim1985

Kutierezharyi wrote: »

Well friends do me one favor, actually I don't know why I am not able to save money.I spend all over the month and get out of pocket by the end of month..So, can you guys suggest me some money saving skills that you people have?

Set up a direct debit to take savings out of your account and into a savings account on payday.

If the money's already gone then you can't spend it. Waiting to see what's left over at the end of every month is the best way to have no savings because nothing is ever, ever left over, no matter how much you earn.

Best tip anyone ever told me when I started saving.