Help to calculate savings interest

Raxximus

PeacefulWaters wrote: »

There would be a transitional period which would allow you to move your money elsewhere.

In what way?



"For example, if you saved £500 a month for 12 months without making any withdrawals, you would earn £81.50 gross interest by the anniversary of the first deposit based on the current variable rate of 2.50% gross p.a./AER"

It's not a phrase designed to mislead. I think your criticism of them is harsh.

I don't want to make this a bashing session, my question was to clear up my own mis-understanding of how these things are worked out.

"There would be a transitional period which would allow you to move your money elsewhere"
I don't want to be in that situation. Can you imagine the chaos........

Lloyds/TSB; I meant regarding their history during the financial chrisis, I'm not going to list out an entire dossier, it's just my own personal view. In any case their product is not right for me so it's irrelevant.

I didn't say the Nationwide phrase is designed to mis-lead what I meant it's not clear to those who don't understand the mechanism. You might, thats great but to a simple mind reading that statement it doesn't make sense how 2.5% on £500 per month equals only £81.50 earned interest. As responded to by others it's a little more complicated and that is the part that is not explained which is what I was referring to. To a simpleton like me 2.5% sounds great for a savings account with that level of flexibility but when you get into the nitty gritty it's not that simple as highlighted by members here, so to some it may seem a bit of a fishing line to get customers in........

ColdIron

Raxximus wrote: »

So I think the Leeds BS is good for my needs I think it's 1.35%

1.35% is a shockingly low rate even by easy access savings account standards. You don't mention the likely sum involved or a practical higher balance. This could strongly influence the choices available to you

Raxximus

Hi ColdIron

I am open to suggestions...........

Initial deposit could be £5k (yes I know the Nationwide was max £1k per month, I was planning to feed in the amount over time)
Monthly increase of anything from £100-£500

Need instant access at least online, no limits on withdrawals, faster payment transfer to external account. Want to keep it in a reputable UK outfit. Looking for simple as possible solution and avoid wanting to transfer to different accounts after a period of time, looking for long term account but with flexibilty for those (more common now) rainy & windy days!

I did a lot of searching and reading T&C's on various accounts and the best I could find for my needs seemed to be Leeds BS E-Saver.

Let me know any suggestions you can think of and I'll take a look.

Thanks

Archi_Bald

Raxximus, you are obviously free to do what you like but just an observation: you seem to be looking for reasons not to do something instead of doing the opposite. It seems a huge shame not to exploit the best interest rates just because a bit of work might be involved. With a little bit of work, you could make £225 gross in the next 12 months from your £5K. Instead you are considering £67.50 gross in a 1.35% account. Each to their own. I am out.

YorkshireBoy

Raxximus wrote: »

Let me know any suggestions you can think of and I'll take a look.

Current accounts are the way to go, and would meet ALL your requirements.


In your shoes I'd go with either Lloyds, TSB, or BoS for 3% AER. Instant transfers, and internally funding the requisite £1K.


Open both with the same provider. First one fill with £5K, then when you've another £1K, open the other and split your cash £3K in each.


Alternatively, go with one of the above and a Nationwide FlexDirect. That'll take care of £7.5K. Downside is Nationwide is a 12 month intro period, whereas the others have been paying 3% AER for a good while now. Of course that could change at any time, but beats 1.35% which is what you seem happy with based on your comments above.


If you are happy with that then you're on the wrong website!

ColdIron

You can get 1.5% with the AA Internet extra. Unlimited payments and withdrawals with no real upper limit. Like all easy access savings accounts the rate is variable so could drop

The Santander 123 will double that to 3% with a limit of £20,000 which seems to be big enough for your requirements. There are some funding pre-requisites but nothing any one cannot easily cope with. The £500 just has to be transferred out and straight back in, job done The £2 pcm fee is easily offset by the cashback on direct debits if you have them so rather than reducing the effective return it normally increases them. Otherwise it seem so tick all your other boxes. It's a trade off between small initial effort and double the return. Only you can decide the value of interest to you. I have 2 of these and it's worth better than £960 pa after tax to me, well worth the effort

Hmm I just checked the AA account and the issue 13 has been pulled last Wednesday and is now 1.30% which is a good indication of how transitory these can be

YorkshireBoy

Raxximus wrote: »

Need instant access...faster payment transfer to external account.


best I could find for my needs seemed to be Leeds BS E-Saver.

Transfers out from this provider seem to be "next day" (as is often the case with building societies, who use main banks for clearing...YBS is the same).


Also, it appears you need to first 'nominate' an external account. Current accounts will let you transfer to ANY external account there and then.


And finally, unless I've misread the Leeds' website the rate is 1.25%, not 1.35%. Have I misread, or have you?

Gromitt

Raxximus wrote: »

to a simple mind reading that statement it doesn't make sense how 2.5% on £500 per month equals only £81.50 earned interest.

It would be exactly the same as having a standard savings account and depositing £500 per month, and I would imagine its common sense that most people will not be expecting interest on funds they are going to deposit in the future.

So instead of using values such as 6.5, you can do it the slightly longer way:

"I'm depositing £500 for twelve months"
"I'm depositing a further £500 for eleven months"
etc, so you divide up the 2.5% evenly.
2.5% on £500
2.5%/12*11 on £500
2.5%/12*10 on £500
etc..

So you would end up with:

£12.50 £11.46 £10.42 £9.38 £8.33 £7.29 £6.25 £5.21 £4.17 £3.13 £2.08 £1.04
It's not going to be perfect as you really need to do it over a daily basis instead of monthly, but it'll get you close enough at £81.25.

Raxximus

Archi_Bald wrote: »

Raxximus, you are obviously free to do what you like but just an observation: you seem to be looking for reasons not to do something instead of doing the opposite. It seems a huge shame not to exploit the best interest rates just because a bit of work might be involved. With a little bit of work, you could make £225 gross in the next 12 months from your £5K. Instead you are considering £67.50 gross in a 1.35% account. Each to their own. I am out.

Sorry I disagree I am not looking for reasons not to do something, I have specific requirements. Just because your suggestions didn't fit my requirements doesn't mean I am looking for reaons on to do it. I simply don't have the time to manage numerous methods. Some may, I don't. I need a one stop shop, it's just how my life is unfotunately. I appreciate everyone's input I really do just we are all different.

Raxximus

YorkshireBoy wrote: »

Transfers out from this provider seem to be "next day" (as is often the case with building societies, who use main banks for clearing...YBS is the same).


Also, it appears you need to first 'nominate' an external account. Current accounts will let you transfer to ANY external account there and then.


And finally, unless I've misread the Leeds' website the rate is 1.25%, not 1.35%. Have I misread, or have you?

Nominating an account is not a problem as that's done on application and it would be my current account. When I emailed them they replied to say it was faster payment, I don't mind if it's next day as long as it's unlimited and transferred via faster payment to my current account. Yes I had that written down wrong you are right it's 1.25%.

I will look into further some other methods explained on this thread and see what's best going forward.

I thank everyone for your input. Please post no more replies I have lots of information here to work on.

THANK YOU.