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comparing monthly interest to annual interest -help needed
evosy1978
Posts: 652 Forumite
Hello,
I have £30000.
The new west brom isa does 3.07% paid annually. So thats £921 in interest paid next year.
At the moment my money is with brum midshires at 2.75% paid monthly.
Can someone help me work out how to work out the interest occrued on the monthly account so I can work out if I would get more if I left it where it is?
Thanks
I have £30000.
The new west brom isa does 3.07% paid annually. So thats £921 in interest paid next year.
At the moment my money is with brum midshires at 2.75% paid monthly.
Can someone help me work out how to work out the interest occrued on the monthly account so I can work out if I would get more if I left it where it is?
Thanks
0
Comments
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Compare the AER values. Higher AER = more interest at end of year0
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I agree in this case but not in every case where interest is accrued monthly versus annually.0
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If the interest is paid monthly, the AER tells you what would be received after one year if the interest is paid every month and compounded.0
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2.75% pa compounded monthly will get about £835, or an AER of 2.785%, assuming it's tax-free."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0
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