Santander Regular Saver

SavingsSearcher

Hi, I wonder if somebody can help me please ?
The Santander Regular Saver account is advertised as follows.
If you've a Santander 123 current account or 123 credit card, you can apply for its regular saver paying 5% AER fixed for a year on up to £200/mth.
So, if you deposit £200/mth that would give £2,400 in a year and 5% of £2,400 is £120.
So, why does the blurb say you'd earn £64.52 interest (gross) if you saved the max for 12 months with this account ?

veryintrigued

Here we go.....

El_Torro

You only earn interest on the amount that is in the account at any given time. There won't be £2,400 in the account from the beginning. In month 1 there'll be £200, in month 2 £400, etc...

stephenadarglas

The only amount of money that is in the account for a year is your first payment. The rest are in there for 11 months, 10 months etc. If they allowed you to put in a lump sum then you would get 5%

molerat

Because the whole of the £2400 is not in the account for the whole year, you only earn interest on what is actually in the account on a daily basis. at the end of month 1 you will have earned interest on £200 so around 83p, at the end of month 2 on £400 so around £1.67. Carry on until the end of 12 months and it works out at around £65.

daveyjp

For a rough guide on interest paid on a regular saver halve the interest rate and apply to the full amount over a year.

2.5% on £2400 is £60.

ColdIron

A more accurate quick calculation for a one year regular saver is
Monthly contribution * annual rate * 6.5
So £65 for this one

aberlyfid_2000

its worthwhile to do, you cant get 5% on £200 elsewhere that doesn't involve bits and coins

polymaff

Your 12 monthly payments are in there for periods ranging from 1 to 12 months. What's the average period? 6.5 months so, over 12 months, expect 6.5/12 of the quoted rate.

EachPenny

aberlyfid_2000 wrote: »

its worthwhile to do, you cant get 5% on £200 elsewhere that doesn't involve bits and coins

What, have Nationwide, M&S, HSBC, Firstdirect all withdrawn their accounts in the last 24 hours?

aberlyfid_2000

probably not, but you would have to spend a best part of christmas day setting up the necessary drip feeding accounts.


given that he has a sant123 account and can set one up with the click of a button, there's no reason to look elsewhere for no gain.