Which Savings account?

looby75

I currently have a savings account with Halifax which pays 4.75% interest, payable each anniversary of the account opening.

I use this account to deposit £10 a week to cover the cost of Christmas, so the money starts to get withdrawn around this time of year. The problem being that I actually opened the account in April a couple of years ago, so I know I'm missing out on interest.

So I'm now looking for an account I can open quickly and that gives a reasonable rate of interest, and if possible one that pays it a couple of times a year rather than just once.

Any suggestions? I'm really no good at all this money stuff!

tom188

How have you missed out on interest? it gets calculated on a daily basis based on the balance in the account on that day.

What features do you want? Branch access/internet/telephone.?

looby75

That's my point (i think), I save all year but start to withdraw my money around the beginning to mid November to pay for Christmas presents. I have much less in my account on the 14th April (the date that I opened the account and the date the interest is calculated and added) than I would have if I had opened my account in November (before I start withdrawing the money) so I am assuming because of this I am not making the most of the money I have saved all year interest wise.

I'm not bothered about having branch access as I do pretty much all of my banking online, so an online account is what I'm looking for really.

tom188

No.
As I say the interest is calculated daily, it is only capitalized yearly. The balance on the anniversary date is no more relevent than any other day of the year.

This would be only the case if interest was calculated annually and capitalized annually in which case wed all pay loads of money in the day before then withdraw it once interest is paid.

ManAtHome

The interest is still there, but "hidden" until April. If you need to draw some of this out, only ways are:
a) close the account each year, then open a new one with any surplus cash (when you close the account all interest due will be rolled in).
b) Get an account which credits interest monthly (many saving accounts offer this - interest rate looks slightly lower, but works out if interest is credited back into the account, not transferred to a current account).
c) Get an account which credits interest at the end of November (may take quite a bit of research, although presumably if close then open a new halifax account this will do the trick).

looby75

Thanks for the advice, so I really didn't have a clue about how interest works!

I think maybe a monthly interest savings account might be a good option for me, as what little interest I get now stays in my account.

Thanks for explaining how it all works everyone

Cypher

If your happy with the Halifax, why don't you just open a new account now, that way the interest will be paid in full this time next year on the anniversary date.

looby75

I think I can get a better rate of interest that I curently do with Halifax. I've checked and it's not 4.75% (as I thought) I get it's 3.75% :eek:

tom188

If you have a current account with halifax then try the websaver (4.75% hopefully rising to 5%) as tranfers between the two are instant.
Otherwise Birmingham Midshires (5.2%) and ICICI (5.45%) are top payers when you want to deposit small amounts.