Best Savings Account (Beginner)

YorkshireBoy

YKay wrote: »

The obvious choice would be 5%, but from the plan natwest gave me, I would gain £160.79 in interest from them, and with TSB I would gain how much over the year?

You've misunderstood what NatWest told you.

With NatWest you'd earn...

(£130 x 12) x 1.5% / 12 x 6.5 = £12.67

And with TSB you'd earn...

(£130 x 12) x 5% / 12 x 6.5 = £42.25

Both figures are over the year.


In post #7 above you've added a years worth of interest each month! Be nice wouldn't it!

YKay

YorkshireBoy wrote: »

You've misunderstood what NatWest told you.

With NatWest you'd earn...

(£130 x 12) x 1.5% / 12 x 6.5 = £12.67

And with TSB you'd earn...

(£130 x 12) x 5% / 12 x 6.5 = £42.25

Both figures are over the year.


In post #7 above you've added a years worth of interest each month! Be nice wouldn't it!

In post 7 is what I copied and pasted from the live chat advisor from natwest. It is the yearly breakdown (apparently).

The interest rates are:

£1 - £5000 1.50% (includes 1.40% bonus)
£5,001 - £10,000 1.00% (includes 0.90% bonus)
Over £10,000 0.20% (includes 0.10% bonus)

I guess it's too good to be true, I will pop into my local TSB tomorrow and open an account.

Thanks all for your help .

AnotherJoe

YKay wrote: »

Would I not be able to pay in £500, then send £370 back? Therefore qualifying for the £500 standing order, but keeping £130 savings in the account.

Yes you would absolutely, mine was just one example.

YKay wrote: »

Anyway....

£130 x 12 months = £1,560

I see the error has been picked up in other posts, eg, after one year, the first months £130 has been in for a whole year so you get the whole 5% for that year for that £130. However, the second £130 will only have been in for 11 months, so you'll get 11/12th of 5%. The third you'll get 10/12th of 5% and the last months, just 1/12th, eg one months interest

This is a common mistake, to forget the money is going in gradually. Obviously once each £130 has been in for a year, you get the full 5%.

msallen

If a NatWest employee really did provide those figures exactly as posted in post #7 then I'd be tempted to save the money with them and then demand they adhere to their promise a year from now !

Only "tempted" mind you. I wouldn't really as I wouldn't be confident of winning the argument. Go with TSB.

Eco_Miser

YKay wrote: »

On the other hand, I was talking to natwest yesterday and they advised me that if I put £130 away in the Savings Builder account per month, instead of my having saved £1560 by the end of the year, the interest I receive will boost my savings up to £1,720.79. See bellow for the working out they provided:

Natwest Savings Builder

Balance / Interest / Balance after Interest

£130.00 / £1.95 / £131.95



Again, i'm no expert.. correct me if there is catches here but it seems more profitable than then TSB as mentioned above only profiting me £78 per year? Natwest I would profit £160.79 per year?

The NatWest rate is 1.5% per annum including a 1.4% bonus for increasing your balance by £100 each month, This is 0.125% per month so the interest on £130 is 16.25 PENCE. For the year, saving £130 a month the total interest is under £13.

The calculation above is for 1.5% per month and if that is what a NatWest representative told you, you could have a case for mis-selling (if you opened the account relying on that information).

An approximate formula for regular savings interest is monthly_payment times annual_rate times 6.5.
It's only approximate because it assumes months are all the same length, and you make each monthly payment on the same day of the month.