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Current act with better interest than savings act
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You made that recommendation on another thread and I asked you to explain why?
https://forums.moneysavingexpert.com/discussion/5800903
You didn't respond.
Please tell us why you are recommending easy access cash ISAs (other than HTB/LISA if appropriate).
Because that is an option. The OP asked for options. Might not be an option for you, but may be an option for someone else. Satisfied? _party_0 -
Oh it's my stalker... again.
Child.
It isn't stalking you to correct your mistakes and point out your oversights and errors. You will also notice that I am not the only person to do this, and I have repeatedly told you that if you continue to post inaccurate or misleading information then I will continue to correct it, as I would with anyone else.The OP would get £242 after 12 months if he put £20k in Leeds Online Access ISA at 1.21%. He'd have to open three of the top paying regular savers (and have the current accounts linked to them, and all the direct debit/pay-in requirements that come with them) in order to get about the same. But as I said, I suggested other options too. So why you felt the need to reply and essentially contribute nothing we don't already know....
Alternatively, if going for an easy access saver on the same amount, the OP could currently earn £270, which is more than £242.
You continue to post about the difficulties of opening current accounts to get the linked regular saver, but this is not difficult.
I posted to point out, as did another person, that recommending the ISA did not make sense.Because that is an option. The OP asked for options. Might not be an option for you, but may be an option for someone else. Satisfied? _party_
Child.0 -
What about a first time buyer LISA if I'm looking to buy a house within a few years? I could put 4k away a year from my savings.
The LISA is a different prospect thanks to the 25% government bonus. In your position I would definitely open one and subscribe the maximum £4,000 each year.0 -
Self-explanatory, yes.ValiantSon wrote: »The effective rate on one years' deposits is 2.69% because the deposit amount is limited each month. Therefore, if you deposit the maximum of £250 each month you will earn a total of £80.64 in interest. Your total capital deposit is £3,000. £80.64 is 2.69% on £3,000. As the OP has a lump sum of money I have posted a rate which allows them to make a direct comparison with what that lump sum would earn in an easy access account.
I thought it was pretty self-explanatory, personally.
However it is a well known error to compare the interest on a rising balance in one account, with the interest on the final balance in a different sort of account.
You are NOT earning interest on £3000 for a year, you are earning interest on whatever the daily balance is (approximately 6.5*£250=£1625 averaged over the year). £80.64 is 4.96% of £1625 (I'll put the 0.04% down to the difference between real life and 12 equal months.).
The money not in the regular saver (which is £37000 in this case, not £1375) is earning money in whichever account it is in (some at 5%, some at 1%), and is entirely irrelevant to the comparison. The correct rate for comparison is the AER, not a silly figure calculated by dividing the interest by the final value of a balance that's risen 12 times over the year.Eco Miser
Saving money for well over half a century0 -
Self-explanatory, yes.
However it is a well known error to compare the interest on a rising balance in one account, with the interest on the final balance in a different sort of account.
You are NOT earning interest on £3000 for a year, you are earning interest on whatever the daily balance is (approximately 6.5*£250=£1625 averaged over the year). £80.64 is 4.96% of £1625 (I'll put the 0.04% down to the difference between real life and 12 equal months.).
The money not in the regular saver (which is £37000 in this case, not £1375) is earning money in whichever account it is in (some at 5%, some at 1%), and is entirely irrelevant to the comparison. The correct rate for comparison is the AER, not a silly figure calculated by dividing the interest by the final value of a balance that's risen 12 times over the year.
I'm sorry, but this is just nonsense. I have given the OP a figure for comparison to holding the money in just an easy access account. The figure I have given them allows for a direct comparison.
I understand what is happening with the interest in the regular saver, but the OP has a lump sum of money so to compare which offers the best return it is perfectly reasonable to talk about the effective rate. Your assertion otherwise is ridiculous.
The figure is not silly, but your trying to argue over it is.0 -
No, you haven't.ValiantSon wrote: »I'm sorry, but this is just nonsense. I have given the OP a figure for comparison to holding the money in just an easy access account.
You given a comparison with holding £3000 in a zero-interest account until it is used in the regular saver.
No it doesn't.The government mandated AER does that.ValiantSon wrote: »The figure I have given them allows for a direct comparison.
I'm just trying to correct your mistakes and point out your oversights and errors.ValiantSon wrote: »I understand what is happening with the interest in the regular saver, but the OP has a lump sum of money so to compare which offers the best return it is perfectly reasonable to talk about the effective rate. Your assertion otherwise is ridiculous.
The figure is not silly, but your trying to argue over it is.Eco Miser
Saving money for well over half a century0 -
If you are saving towards a mortgage why not bang the lot into a 2 year (2.1%) or 3 year (2.2%) fixed rate saver with Atom? Saves all the faffing around and Atom do very competitive mortgages too!0
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No, you haven't.
You given a comparison with holding £3000 in a zero-interest account until it is used in the regular saver.
No I haven't. I gave them a comparative figure that they could use with any easy access rate that they wanted.No it doesn't.The government mandated AER does that.
No it doesn't. That produces a potentially misleading comparison because it doesn't actually show real life returns.I'm just trying to correct your mistakes and point out your oversights and errors.
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The total return on a lump sum of £3,000 in a 5% regular saver is 2.69% of that lump sum.0 -
But you are basing the comparison on not having the money not in the regular saver earn anything at all. In practice it will be earning something.ValiantSon wrote: »No I haven't. I gave them a comparative figure that they could use with any easy access rate that they wanted.
And your claimed effective rate doesn't either.ValiantSon wrote: »No it doesn't. That produces a potentially misleading comparison because it doesn't actually show real life returns.
Imagine an instant saver account paying 4% AER, and a regular saver paying 5% AER. What is the best strategy?
Interesting. the rude word is !'d out, but still appears in the edit box.ValiantSon wrote: »No you aren't, you're being a !!!!!!.
And I am trying to correct your mistakes.
Being able to quote you was just a bonus.Eco Miser
Saving money for well over half a century0 -
But you are basing the comparison on not having the money not in the regular saver earn anything at all. In practice it will be earning something.
Yes it would be earning something, but as a means of showing the better return in the regular saver the figure I gave is more useful than the AER. I cannot give a comparative figure including the money held in the regular saver because I don't know what interest rate that will be.And your claimed effective rate doesn't either.
Yes it does. How doesn't it? It is the percentage return on the lump sum.Imagine an instant saver account paying 4% AER, and a regular saver paying 5% AER. What is the best strategy?
On what sums?
I'll assume the £3,000 lump sum that would be the case for the OP. At 4% the return would be £120. In a 5% regular saver the return would be £64.52. Without drip-feeding the money in to the regular saver as well (which I was specifically ignoring to give a clear comparison) the easy access account on its own would deliver the better return.
I never sad anything about not combining the easy access account with a regular saver. I gave a figure for comparison on the lump sum and, I'll say it again, this was intended to show the OP that the regular saver was a better option than leaving the money in an easy access account.
As, however, there is no easy access account paying 4% the question is irrelevant.Interesting. the rude word is !'d out, but still appears in the edit box.
I couldn't care less.And I am trying to correct your mistakes.
Being able to quote you was just a bonus.
You may be trying to correct my mistakes, but they aren't mistakes. You are arguing a different point.
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