Which Is Best Interest ??

trev012

I have just lifted my savings from ING Direct and deposited them in Sainsburys bank but I'm not convinced it is the right thing to do. You see, ING pay only 4.5% interest and Sainsburys pay 6.25% per annum. I can do my maths but the thing is, ING pay the interest monthly and Sainsburys pay the interest annually. I'm sure I read on this site that you get more with monthly interest but I can't find this info anywhere.

Can someone more astute than me please advise.

Many Thanks,

Trev012

:beer:

purch

At current interest rates the compounding effect of monthly interest is about 1/4 pct

Aegis

You've definitely done the right thing. Both accounts will compound their interest on a daily basis and pay it at defined dates. ING's will be once a month, and Sainsburys will be once a year. Aside from that there's very little difference, so you're fine where you are now.

EDIT: As pointed out below, the above passage should read:

You've definitely done the right thing. Both accounts will calculate their interest on a daily basis and pay it at defined dates. ING's will be once a month, and Sainsburys will be once a year. Aside from that there's very little difference, so you're fine where you are now.

LittleVoice

Aegis wrote: »

You've definitely done the right thing. Both accounts will compound their interest on a daily basis and pay it at defined dates. ING's will be once a month, and Sainsburys will be once a year. Aside from that there's very little difference, so you're fine where you are now.

Interest will not be compounded daily (particularly on large amounts it would be lovely if it were!).

Interest will be calculated daily and then compounded (if not paid out to another account) on whatever date or at whatever regularity specified.

purch

............which is where you can get about 0.25 pct extra by compounding your interest if it is paid monthly.

trev012

EH ! Not sure what this "Compounded" bit means. Neither ING nor Sainsburys give this option :mad:

KTF

Compare the AER figure to see the true rate you will get. Sainsburys will result in more interest over a year though.

Aegis

LittleVoice wrote: »

Interest will not be compounded daily (particularly on large amounts it would be lovely if it were!).

Interest will be calculated daily and then compounded (if not paid out to another account) on whatever date or at whatever regularity specified.

My mistake, it's an account with gross and AER the same. Apologies!

McSaver

ING pays 5.4% BTW. I would certainly get my money outta ING though.

purch

"Compounded"

Basically means Interest on Interest

If the interest is credited to your account each month, and you leave it there untouched then it earns interest.

It is worth about an extra 0.25 pct, which is shown in the AER

But as the ING account pay's 1.75 pct less then it's certainly not worth leaving it there.

trev012

Thanks to all who replied with advice. I can now sleep easier dreaming of what to do with all the extra interest I will accumulate.

Regards,

Trev012
:T :T :T