monthly or annual interest?????

vixen1500

Hi, going to open a santander esaver annual interest 3.2% monthly 3.16%.

None tax payer and money will just be left in there.

Just wondering which works out the best?

With monthly I get to see my money growing and it will then get more interest each month.

Just wondering if there is an easy way to compare amount of interest earnt over the year.

Thanks

CLAPTON

essentially they are the same

the monthly rate is 3.16/12 which when compounded up gives 3.2APR

personally I like monthly interest as you can quickly see when the bonus runs out and it's time to change

fiesta04

To be honest it works out the same over the year. Even if you had £10000 the difference would only be about 5p.

F4

Consumerist

In theory, they should be the same but see <this thread> (post #11).

vixen1500

thanks
I normally go for the monthly interest, as i said I like to see it growing - just wondered if I was losing out choosing this option.

ColdIron

Annual can be useful if you are a higher rate taxpayer and you want to defer your tax bill for a year

If you take monthly you will have to declare it, or some of it, 2013/14, with annual interest you can put this off until 2014/15

gkerr4

cold iron makes an interesting point, but personally, i always pick monthly -i'd take a rate cut to stay with monthly. I like to see the few hundred quid a month going in from the interest - makes me feel better!