better rate of interest

rb10

Cynical-me wrote: »

Thanks rb10, I would appreciate your calcs though, as when I went through a year of months adding £300 per month I came out with a much lower figure - as I understand it, and for example, the last monthly deposit would only attract 1/12th of 8% on £300 in interest. (i.e, only the first months deposit of £300 would get the full 8% interest.

I hope I am wrong - could you explain please?

Thank you.

All of the deposits get 8% interest. But interest is always quoted as an annual rate, so as the final payment is only in the account for one month, you only get one months' worth of interest on this amount.

It's the same as if you had a 'normal' account paying 3%, and paid in £1000 one month before the interest payment. You would not expect to get £30 interest here (3% of £1000), as the money has not been in the account for the whole year. Instead, you'd get one months' worth of interest, which is 1/12th of £30.

To calculate an estimate for the gross amount of interest received on any Regular Savings account, multiply the monthly deposit by the interest rate (e.g. 0.08 for 8%), and then multiply by 6.5.

Cynical-me

Thank you for clearing that up for me - I'd never make an accountant!

Based on hour help and advice, I will not be sending any cash to Australia after all.

Thank you again.