How much can you save?

Vicky82

Thanks guys!

I'm just so annoyed with myself, I've had this "milestone" in my head for ages and now it's so close, but still so far!!

I will know better where I stand on pay day. Roll on the 28th!!

EagerLearner

Hoping to save quite a bit this week but depends on when clients pay the invoices.

I am putting the interest earned on my IceSave account into 'Christmas' category in my savings tower (see download in sig), which is fab as the account is now earning £11 a month so with the £100ish already put aside for Xmas, I won't need to save as much as I thought I was going to into there as the interest money each month will help alot! All the money in the Xmas category so far has been from cashback sites, surveys and interest, so Christmas will be.... free!

Woodyrocks

Do you get your ICesave interest paid monthly or yearly?

EagerLearner

I get the interest at IceSave paid monthly, couldn't wait to get the news in a year, I like seeing it come in and get higher every month. IceSave pay on the 15th of the month (for me anyway) and then First Direct pay interest on my ISA at the end of the month, so it's only a 2 week break between my 'hits'!

PJD

I'm currently saving money, - i've managed this by house sharing, - at the moment with friends which is brilliant, but i'm going to have to move out & find somewhere else come August...

...i'm dreading sharing with strangers, but it will be the best option financially, & will give me the flexibility I need as I think I will be changing jobs later on in the year.

As much as i would like to be settled, not only do I not know where, but I refuse to buy another property as I firmly believe houses are not worth what people are asking for them at the moment. I'd love to treat myself to a nice car also(!!), but without being settled I dont think that's the best idea (as tempting as it is!

My money is in the following places:

£6,026 = ING-Direct ISA 6.55% AER
£31,428 = ICESave 5.79% AER
£21,425 = Abbey National ESaver 5.35% AER
£223 - Abbey Current account 2.5% AER

The Abbey ESaver savings account is linked to my current account which makes it easy to transfer money to/from (it's instant). But other than that, - I have no idea why i've got over 20 grand in there at that rate! Think its the hassle of setting up yet another account :rolleyes:

PJD

EagerLearner wrote: »

I get the interest at IceSave paid monthly, couldn't wait to get the news in a year, I like seeing it come in and get higher every month. IceSave pay on the 15th of the month (for me anyway) and then First Direct pay interest on my ISA at the end of the month, so it's only a 2 week break between my 'hits'!

I feel the same, & have also opted for the lower IR just to see the interest each month!

Woodyrocks

I have just changed my interest level yet again on Icesave! Pretty sure I want it yearly now what with the new rates they have brought in. Shall wait for A&L to pay out interest for this month and then also move the chunk into icesave as well as I have decided there is no point having £6000 in A&L just for the sake of it when it could be earning that little bit more.

TBH I was/am starting to feel overwhelmed with all the accounts I have opened!

iamsam

PJD wrote: »

I feel the same, & have also opted for the lower IR just to see the interest each month!

You don't get any less interest by getting paid monthly instead of annually. Sure, the gross rate is different, but the AER is the same - that's what matters.

Icesave wrote:

Where you choose to have interest paid annually the AER is 5.95% (Gross p.a. 5.95%), If you choose monthly interest the AER is 5.95% (Gross p.a. 5.79%).

If you have £1,000 in your account over a full year and are paid interest annually, every day they'd work out (1/365) * 5.95% * £1000 = 16.3p. After a year, they'd add them all together, so you'd get 365 * 16.3p = £59.50.

If you're paid monthly, after month 1 they'd add 30 * 16.3p = £4.89. However, the next month they'd work out a daily interest of (1/365) * 5.95% * £1004.89 = 16.4p. This gets more significant every month (due to compound interest) - at the end of the year you'd have £61.15 interest.

So, if you're paid monthly, the gross (or nominal) rate has to be lower to compensate for this effect. As long as the AER is the same (and you leave the monthly interest payments in the account), you end up getting the same amount in interest overall.

Martin has written an article which describes this (and more):
Interest Rates Guide: Everything you ever wanted to know!

zag2me

Opened up an ICICI hisave account today @ 6.05% for my house equity to go into when I sell.

Having a bit of a tough month this time with car insurance, new clutch, holiday and a few major parties so nothing extra saved yet.

gelato_cat

Actually, if you're a taxpayer, you do, cos you're charged tax on the interest each month and then earn interest on the net amount in the following month. If you get it yearly, the interest is calculated in the background and the tax is taken off at the end of the year. The difference is usually negligable for most people though.

Suze

iamsam wrote: »

You don't get any less interest by getting paid monthly instead of annually.