Simple solution to finding true% on 6% monthly savings?

alggomas

Is there a website or simple way of finding the true interest rate on a monthly drip feed account please?

E g. £250 a month at 6% headlines rate.( 1yr ).

Thanks.

someone

All money earns 6% in the account. When it is not in the account it earns whatever rate it gets in your other account.

If your asking what the interest would be then rule of thumb is (£250 * 0.06)/2 = £90 less any tax which you might pay

alggomas

Sorry ,may have put question awkwardly.

If I have monthly savings of say £500 a month for one year and the headline rate is 6%. What is the true interest rate I am getting please?

FatherAbraham

alggomas wrote: »

Sorry ,may have put question awkwardly.

If I have monthly savings of say £500 a month for one year and the headline rate is 6%. What is the true interest rate I am getting please?

6%.

Warmest regards,
FA

Careful_ly

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

At the bottom of this article is a calculator that will show you the return to expect.

The interest rate is 6%, but there are too many people who dismiss the regular saver accounts because they don't believe it.

alggomas

Thanks to all replies. I think I have it now.

kidmugsy

alggomas wrote: »

If I have monthly savings of say £500 a month for one year and the headline rate is 6%. What is the true interest rate I am getting please?

The headline rate is the true gross rate. If you pay income tax, however, 20% tax will be subtracted from the interest before you receive it, so you'll be getting 4.8% p.a.

If you are not a taxpayer and want to receive the full 6% p.a. you need to complete an R85 form, which your bank or building society can provide.