Regular Saver - have i been ripped off?

tom188

RobLondon1984 wrote: »

I also have a similar problem. I was told that my account would recieve 3.45% gross interest, but when I got a tax certificate after closing my account, I calculated that I got 1.16% gross interest. I proberly need to complain, do I go to the branch or do it over the phone?

Yes but if youve been regular saving that is the approximate rate you would have been earning - i presume you were paying in monthly so cannot expect a return of 3.45% on the whole balance.

worcester1

RocketMan wrote: »

I think that it is rather lower than it should be, the table below assumes that interest is added at the end of the year, while being based on what is in the account on a monthly basis. It assumes that you opened the account on the 1st, and that all payments went in on the 5th of the month.

Month Days Date In Balance Interest Balance Money IN
January 31 5 £0.00 £1.86 £250.00 £250.00
February 28 5 £250.00 £3.57 £500.00 £250.00
March 31 5 £500.00 £6.12 £750.00 £250.00
April 30 5 £750.00 £7.97 £1,000.00 £250.00
May 31 5 £1,000.00 £10.38 £1,250.00 £250.00
June 30 5 £1,250.00 £12.09 £1,500.00 £250.00
July 31 5 £1,500.00 £14.64 £1,750.00 £250.00
August 31 5 £1,750.00 £16.77 £2,000.00 £250.00
September 30 5 £2,000.00 £18.28 £2,250.00 £250.00
October 31 5 £2,250.00 £21.03 £2,500.00 £250.00
November 30 5 £2,500.00 £22.40 £2,750.00 £250.00
December 31 5 £2,750.00 £25.29 £3,000.00 £250.00

Balance at 1 year £3,160.39
Interest at 1 year £160.39, no tax
20% tax £128.31
40% tax £96.23

I hope this helps, I am reasonably sure my calcs are accurate, wont know till my reg saver matures

Mine matures in June07 at £3000 with Halifax 7% regular saver. I made the same assumption until the good people of this site corrected me I am expecting to make a mere about £60 interest (after tax)

Yours still seems bit low @ £53 maybe you are a high tax payer.

Can anyone tell me if the same calculation as aboves is how ISA savings are caculated? I wish to pay the full £3000 I get from my regulare saver into an ISA account towards the end of next fiinancial (March08). Will I get the full £163 interest, £3000 @5.44%

RobLondon1984

tom188 wrote: »

Yes but if youve been regular saving that is the approximate rate you would have been earning - i presume you were paying in monthly so cannot expect a return of 3.45% on the whole balance.

Its a fixed rate account, not a regular savings account.

LittleVoice

Worcester1
If you are putting in £3000 in a 07-08 cash ISA in March 2008 (say on the 6th) at 5.44% gross/AER, by 5 April 2008 you will have achieved £13.82 interest.
Reduce that by 1/31 for each day later than 6th March.

Some ISAs use different dates for payment of annual interest but I've used fiscal year end.

tom188

3.45% on a fixed rate account? What was the term and/or date you opened it?

worcester1

Thanks LittleVoice!

Any idea what's the best way to maximise the interest I get paid at the end of next financial yeah - 07/08.

As mentioned before, I get my full £3000 from my regular saver on 1st July07 (3 months after the ISA started). Do I;

put the whole £3000 into the ISA and earn 9months interest?
put the whole £3000 another savings account and drip feed into the ISA?

I am lost now

Any ideas on how to make my £3000 work hard for me just by using cash savings?

RobLondon1984

tom188 wrote: »

3.45% on a fixed rate account? What was the term and/or date you opened it?

Its a very old savings account opened in 1998. What I mearnt was the interest was fixed, so that money can be withdrawn and put in.

InMyDreams

RobLondon1984 wrote: »

I also have a similar problem. I was told that my account would recieve 3.45% gross interest, but when I got a tax certificate after closing my account, I calculated that I got 1.16% gross interest. I proberly need to complain, do I go to the branch or do it over the phone?

Out of interest, how did you calculate this? Your tax certificate would have shown the interest earned from the beginning of the tax year in which you closed the account to the closing date. Unless you closed the account on the very last day of the tax year and did not add to or withdraw from the account, the actual interest rate earned would be quite complicated to work out, as the money only earns the interest while it's in the account. 'Fixed rate' does not mean that every penny deposited earns a fixed 3.45% no matter how long it stays in the account or how long the account is open. You will only earn the full 3.45% on money that has been sat untouched in the account for a whole year. Money in there for only 6 months, say, will earn about half that (pro-rata-ish). If you have been depositing and withdrawing during the year it gets far more complicated.

I often wonder whether a DER would make things clearer than an AER. people could then work out day-by-day interests and would realsie that money can't earn if it's not there.

Rob, if I've got the wrong end of the stick, I apologise for being unnecessarily patronising.

RobLondon1984

InMyDreams wrote: »

Out of interest, how did you calculate this? Your tax certificate would have shown the interest earned from the beginning of the tax year in which you closed the account to the closing date. Unless you closed the account on the very last day of the tax year and did not add to or withdraw from the account, the actual interest rate earned would be quite complicated to work out, as the money only earns the interest while it's in the account. 'Fixed rate' does not mean that every penny deposited earns a fixed 3.45% no matter how long it stays in the account or how long the account is open. You will only earn the full 3.45% on money that has been sat untouched in the account for a whole year. Money in there for only 6 months, say, will earn about half that (pro-rata-ish). If you have been depositing and withdrawing during the year it gets far more complicated.

I often wonder whether a DER would make things clearer than an AER. people could then work out day-by-day interests and would realsie that money can't earn if it's not there.

Rob, if I've got the wrong end of the stick, I apologise for being unnecessarily patronising.

I know what you mean, I worked out the interest I earned, say 30 weeks, divide the gross interest earned by 30, multipy it by 52, giving me the interest I would of earned in a tax year. The money was not withdrawn or deposited, so I just divided the interest by the amount I have. The gross interest would be less, as I am calculating on the interest as a one year fixed rate account, rather then interest on amount plus interest.

nielingren

yeah mine is the same i got 52.99 should i give them a call?