Best thing to do with 3k

mollycat

TheShape wrote: »

No, No, No, No, No ,No, No!!!!!!! :doh:

Yep, had put my tin hat on after reading "Bravepants" post! :eek:

DiggerUK

first78 wrote: »

.......I am not a first time buyer and currently have a mortgage but am looking to move in 2-3 years.......

Then pay down the mortgage. 3k isn't life changing, and debt is debt..._

jimjames

Bravepants wrote: »

Sounds good doesn't it? BUT, you pay your money in by £500 per month chunks, so the actual annual interest rate you get on these regular savers is more like half the advertised rate.

It sounds good and is good. Regardless of what you say the rate is 5%. Why on earth would a bank pay interest on money not in the account? That would be like charging mortgage interest on the starting balance not the current one and I think you'd be annoyed with that!

unitedwestand

Pay off any debt

Bravepants

jimjames wrote: »

It sounds good and is good. Regardless of what you say the rate is 5%. Why on earth would a bank pay interest on money not in the account? That would be like charging mortgage interest on the starting balance not the current one and I think you'd be annoyed with that!

I seem to have caused a storm here, and I'm sorry. But I thought you could only pay in £500 per month.


Can I pay in £6000 at one go, say in January, and expect 5% on that after the end of the year, and pay nothing else in for the rest of the year?


Or do I have to split the £6000 into £500 chunks to pay it in monthly?



If I have to split into chunks then, as I stated, the "return" is less than 5%, even though the interest rate is stated as being 5%.

If I'm wrong then I'm very sorry. Because I would love to shove all the cash I've got wallowing in my Santander 123 into a 5% account! But I don't want to have to pay in monthly to get the interest rate.


Just to avoid ANY confusion, I'm talking about this account:


http://www.nationwide.co.uk/products/savings/flexclusive-regular-saver/features-and-benefits





P

lpgm

You pay £500 in each month, and always get 5% on what's in the account. It is what it is.

mollycat

No need to apologise, no major harm done.

Yes, you do have to save in £500 "chunks"; that doesn't stop the rate on your cash being 5% though .

You're probably unaware, but this point has been debated previously with some vigour; hence the response to your post!

bigadaj

Bravepants wrote: »

I seem to have caused a storm here, and I'm sorry. But I thought you could only pay in £500 per month.


Can I pay in £6000 at one go, say in January, and expect 5% on that after the end of the year, and pay nothing else in for the rest of the year?


Or do I have to split the £6000 into £500 chunks to pay it in monthly?



If I have to split into chunks then, as I stated, the "return" is less than 5%, even though the interest rate is stated as being 5%.

If I'm wrong then I'm very sorry. Because I would love to shove all the cash I've got wallowing in my Santander 123 into a 5% account! But I don't want to have to pay in monthly to get the interest rate.


Just to avoid ANY confusion, I'm talking about this account:


http://www.nationwide.co.uk/products/savings/flexclusive-regular-saver/features-and-benefits





P

For many people, if not most, then the regular savings sums will come through from salary or other regular payment on a monthly basis.

So the fact the sums are limited is less problematic, unless they have been promised their annual salary upfront by their employer of course.

Bravepants

No worries all.


I realise this has been debated and that's why I replied this time.


My concern was that, at the end of the day, sometimes the rate can be misinterpreted, particularly by new investors who see a fantastic rate up front, and then realise that they can't just calculate 5% of £3k (= £150) and that's what they will get.


The "return" you get on your £3k or £6k won't be 5% because of drip feeding, even though we all know the interest rate is 5%.


Cheers and Happy Wednesday! :-)


P

mollycat

Bravepants wrote: »

Sounds good doesn't it? BUT, you pay your money in by £500 per month chunks, so the actual annual interest rate you get on these regular savers is more like half the advertised rate.

So expect approx 2.5% actual return from this account after the year is up. There is an illustration on the website.

Telling people this is just plain wrong though?

I'm not sure that helps those that are supposedly under any misaprehension.

Anyway, that's my tuppenceworth

Happy Wednesday to you too.