5% Reg Saver

clairbear_3

Hopefully one of you mathmaticians help me calculate gross interest on my A/L 5% reg saver paid in £250/mnth total £3k bizarelly £60 gross interest was added in March?? but nothing since...was expecting closer to £75??

apt

Are you sure the interest is gross? Perhaps it is £60 after deducting 20% tax. Another possibility is that interest added in March is not for a whole 12 months. Did you open and start funding the account on the same day in March 2010?

Mr_K

apt wrote: »

Have you forgotten about the 20% tax deduction?

Calculator here:- http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

It should be about £80 (£64 after tax). Don't spend it all at once....

Stochasticity

At 5% gross, assuming payment of £250 on the day of account opening and further £250s on the same date in each of the following 11 months, gross interest should be £80.64 give or take a couple of pence. Making net interest £64.51. Of course, if your first payment wasn't on the day of account opening or you didn't always pay in on the same date of the month, then interest will vary from that.

YorkshireBoy

It's been a while since I had an A&L regular saver, but they used to pay the interest in 2 tranches (a large payment, followed by a slightly smaller one).

The first seemed to coincide with the associated current account opening date, and the second was paid on the 12 month anniversary of the first payment to the regular saver.

The formula you need to use to best approximate total gross interest is (£250 x 12) x 5% / 12 x 6.5 = £81.25

moonrakerz

Their figure is totally correct.

£3000 at end of 12 months = average balance (over 12 months) of £1500.
£1500 x 5% = £75.
Tax at 20% = £15.

Leaves you £60.

oldfella

£3000 at end of 12 months = average balance (over 12 months) of £1500.

---

unfortunately incorrect, the average balance on a £250 regular saver is £1625.

YorkshireBoy

moonrakerz wrote: »

Their figure is totally correct.

That's not how it works.

The first £250 is in there for 12/12ths of the year...the second for 11/12ths of the year, and so on, meaning the calculation is

12/12 + 11/12 + 10/12......+ 2/12 + 1/12

= 78/12

= 6.5

And that's where my 6.5 multiplier came from in my earlier post.

moonrakerz

oldfella wrote: »

£3000 at end of 12 months = average balance (over 12 months) of £1500.

---

unfortunately incorrect, the average balance on a £250 regular saver is £1625.

Depends on when the payments are made, even with £1625 average the interest is still only £65.

clairbear_3

Thanks for all replies...seems not only me confused ..been in branch today and told to expect some more interest on June 1st(maturity) thats 6 weeks after 12th payment?
Just to clarify the 1st(£250) was supposed to go on 21st APR 2010 but it failed so after contacting them it went in on 15 MAY..final payment(12th) 15 APR 2011..cb

clairbear_3

What should my 'terminal' interest be.. as the 1st £250 has been in 12.5 months
As stated already credited £60 GROSS..£50 nett