new PSA allowence

james3333

jimjames wrote: »

Yes. But 3% on £1 and 3% on another £1 is not 6%.

confused, could you confirm :
£3,000 + 3% = 3090 & £3,000 +3%=3090
....so a total of £180 interest, is this correct?
thanks

colsten

You have to use the gross rate - 2.96% - to calculate interest. Interest is always calculated using the gross rate. So it's £88.8 per £3,000.

Naturally, if you have two 2.96% accounts, you get 2.96% in each of them, on up to £3,000 in each.

You should also skim off anything above £3,000 into another interest bearing account.

eskbanker

james3333 wrote: »

confused, could you confirm :
£3,000 + 3% = 3090 & £3,000 +3%=3090
....so a total of £180 interest, is this correct?
thanks

Although colsten is of course right about the gross v AER rate, let's just go with your 3% as a round figure - the point everyone is trying to make to you is that if you earn 3% on two lots of £3,000, then yes, it's £180, but as it's £180 from £6,000 not £3,000 it's still 3% not 6%!

james3333

ah i see, yeh you are indeed correct...still, just trying to make the most of my money

amilo1505

if I retire and just live on savings interest,which is about £200 a month,will I have to pay tax over the £1000 personal savings allowance.

eskbanker

amilo1505 wrote: »

if I retire and just live on savings interest,which is about £200 a month,will I have to pay tax over the £1000 personal savings allowance.

If you have no other income at all (not even state pension?) then you'd be well below the threshold for basic income tax anyway so no, but living on £200 a month sounds ambitious!