Which bank??

Archi_Bald

Sethan wrote: »

As I said, because the account that pays 5% is a current account.Everyday due to bills, shopping, etc the amount gets lower and lower,and as such,the interest too.

I am not sure what point you are trying to make - naturally, if you spend money, you won't get interest on it any longer.

Though for many people, the amounts in many of their current accounts don't get used on bills and shopping, so don't typically get lower.

Archi_Bald

Sethan wrote: »

Well,wasn't trying to make any point in particular. I use a current account for current operations (as intended by God:) ).But I guess I understand now what you and other people were saying. And that is using a current account, like a traditional savings one, no? Meaning you just put the money in a "current" account but don't necessarily use it as one.

Well, yes.

Tell God he needs to update his current account usage guide.

Gromitt

Sethan wrote: »

As I said, because the account that pays 5% is a current account.Everyday due to bills, shopping, etc the amount gets lower and lower,and as such,the interest too. That's what I was referring to; a fixed,lower interest rate on a flat amount can give in certain conditions higher return than a higher rate placed on an ever lowering amount.

My 5% current account has had the maximum balance in it since day 1, it has never dipped below the maximum. It pays no bills and has no withdrawals. It is simply a savings account. After 12 months, the account will be closed and the money moved elsewhere.

My bills are paid by a 3% current account, so yes, the account fluctuates. Typical account balance is about 20K. I don't see how moving it to a lower interest savings account could get more return. 3% on an average of 15K - 20K is always going to be more than 2% on a fixed 15K.

grumbler

Sethan wrote: »

"Certain conditions" like if your direct debits (rent/bills/etc) are setup a day after you get paid, making your current account funds (that get 5% gross) to diminish fast.
Having 2% of X amount savings is higher that 5% on current account if the median value over the length of a month isn't at least 2.5*X.
Somehow I feel I just confused things even more:rotfl:

In fact it's you who is confused/deluded.
I can only repeat that moving any amount from 5% to 2% will result in losing 3% on this amount. As simple as that.

Archi_Bald

Sethan wrote: »

Ah..there we go.You could have typed that earlier and spare us 2 pages of debates .
Typically, in my country they don't pay interest on current accounts (they do give instead about 8% gross savings),so never came to me the idea of using one as a savings one.

Snap. If you had told us earlier you are not talking about UK accounts, we could indeed have saved this discussion (although your logic is still full of holes).

It's of no significance to this thread (and most probably not to 99.99% of MSE users) that in your country interest rates are 8%. Though out of interest, perhaps you can tell us where you are, and what the inflation rate in your country is.

Apologies to the OP that the thread has gone off the rails.

mgdavid

Sethan wrote: »

Ah..there we go.You could have typed that earlier and spare us 2 pages of debates .
Typically, in my country they don't pay interest on current accounts (they do give instead about 8% gross savings),so never came to me the idea of using one as a savings one.

And that is where this forum fits in, for us all to learn from each other and share new ideas so we can maximise what money we have.

Archi_Bald

Thank you for further clarifying your information. We should end this discussion now because it has nothing to do with the OP's question.

As my parting comment I would like to say please check your facts for any future posts.

Also, get ready for some massive drops in interest rates in Romania - they are already down to half of what you claimed and are expected to come down further.
http://www.deltastock.com/english/resources/interest_rate_history.asp?curr=RON
http://www.reuters.com/article/2013/11/05/romania-rates-idUSL5N0IQ1BH20131105
http://www.bloomberg.com/news/2013-10-10/romanian-inflation-slowdown-strengthens-case-for-more-rate-cuts.html