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First Direct 8% Savings Account
supersaver19
Posts: 6 Forumite
Hi, could someone help me clear up a few questions about this Savings Account I read about on the homepage?
I believe I can put in £300 max a month and therefore £3600 for the year maximum. And when is interest paid on that money?
If I put in that £300 every month for the 12 months, how much interest in total will I get at the end of the year after tax at 20% has been removed?
I think it would be £230.40 but not sure if I work it out correctly, given that how does this compare to the top AA ISA at 4.1% for the first year?
As I currently get 3% on my £5000 in Lloyds Vantage but am thinking of moving to First Direct for the £100 signup and the savings account.
I believe I can put in £300 max a month and therefore £3600 for the year maximum. And when is interest paid on that money?
If I put in that £300 every month for the 12 months, how much interest in total will I get at the end of the year after tax at 20% has been removed?
I think it would be £230.40 but not sure if I work it out correctly, given that how does this compare to the top AA ISA at 4.1% for the first year?
As I currently get 3% on my £5000 in Lloyds Vantage but am thinking of moving to First Direct for the £100 signup and the savings account.
0
Comments

You will get about half the interest you expect. Interest is only earned while the cash is in the account so you won't get 12 months' interest on funds that are in the account for only part of the year. On average there will be about £1800 in the account over the year. £1800 * 8% = £144 gross or £115.20 net of tax.
This misunderstanding has been covered at length many times in discussions about this and other regular savings accounts.
I am unaware of an AA ISA paying 4.1%.0 
You will get about half the interest you expect. Interest is only earned while the cash is in the account so you won't get 12 months' interest on funds that are in the account for only part of the year. On average there will be about £1800 in the account over the year. £1800 * 8% = £144 gross or £115.20 net of tax.
This misunderstanding has been covered at length many times in discussions about this and other regular savings accounts.
If fact, you get a bit more. A good rough calculation for regular savers with the same amount paid monthly on the day of opening is Total * Interest * 6.5/12. Multiply the result by 0.8 if you pay tax.
So, 3600 * 0.08 * 6.5/12 * 0.8 = £124.80
I got £124.99 on mine when it matured last year.
If you are adding to the RS from other savings, don't forget that the money waiting to be paid in is also earning interest elsewhere.
HTHDo Money Saving sites make you buy more bargains  and spend more money?0 
supersaver19 wrote: »Hi, could someone help me clear up a few questions about this Savings Account I read about on the homepage?
I believe I can put in £300 max a month and therefore £3600 for the year maximum. And when is interest paid on that money?
If I put in that £300 every month for the 12 months, how much interest in total will I get at the end of the year after tax at 20% has been removed?Will I receive interest on my Regular Saver Account?
We calculate interest on the daily cleared balance on your Regular Saver and will pay this to your Regular Saver on the first anniversary of the date your account was opened.
You will receive interest on your Regular Saver at the fixed Regular Saver interest rate advised to you at account opening.
How much interest will I get?
During the period of the Regular Saver, interest is calculated on the daily cleared balance on your Account and applied to your Account on the anniversary of the account opening. For example, if you save the full £300 per month for 12 months you would receive approximately £156 gross, (£124 net) in interest at the end of 12 months.Did you really mean to put loose?
Lose: no longer possess, not to retain, unable to find
Loose: not firmly or tightly fixed in place0 
Bear in mind you can put the lump sump in a savings account now (nonISA) and then drip feed it into the 8% saverFaith, hope, charity, these three; but the greatest of these is charity.0
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