The Top Easy Access Savings Discussion Area

RG2015

jaceyboy said:

Can someone tell me the why you get less interest for monthly interest please?

jaceyboy said:

VNX said:

jaceyboy said:

Can someone tell me the why you get less interest for monthly interest please?

It’s because the interest compounds. 

Can you explain please?

If you get £50 interest in June, and you move it to another savings account, the £50 will start will earn interest in the other account.

This interest earned on interest is called compounding.

If you leave the interest in the first account with the original deposited amount, it will earn more interest in the second month.

Over 12 months the interest earned would be higher each month. The higher rate for annual interest reflects 12 months of compounding.

grumbler

jaceyboy said:

VNX said:

jaceyboy said:

Can someone tell me the why you get less interest for monthly interest please?

It’s because the interest compounds. 

Can you explain please?

Lower figure - 'gross' is when they credit the interest every month and you withdraw it. Higher figure - 'AER' is if you leave the interest in the account and it accrues interest. The latter is called 'compounding'. The same if the interest is credited annually (but still calculated daily)
MSE:  How compound interest works

wiseonesomeofthetime

1002299 said:

Bit of feedback....
Given that MSE is impartial, I do wonder if you have something against Chip.
They are easy access and better rate than most. I find the app great.
In your current iteration of the guide they are not mentioned in the blurb despite having a higher deposit maximum than the lower % account that makes it to your blurb 

The first paragraph relates to app-only savings accounts. Tandem lead at 4.10% 

Second paragraph relates to "online banking", under which Chip do not fall, so are not mentioned.

4justice2

Haven't had an email yet, but Ford Money up to 3.84% monthly showing on account (I believe that's 3.91% on annual basis).

BooJewels

4justice2 said:

Haven't had an email yet, but Ford Money up to 3.84% monthly showing on account (I believe that's 3.91% on annual basis).

I noticed the same last night too - it was expected today.  Their fixes have gone up too, as I was keeping my eye on them.

wiseonesomeofthetime

4justice2 said:

Haven't had an email yet, but Ford Money up to 3.84% monthly showing on account (I believe that's 3.91% on annual basis).

I did post it on the No Chat thread, then deleted it after noticing that it was already on page 1 under UpComing section.

Showing as 3.91% AER on Moneyfacts

Only got £1 in mine anyway

FindingBBob

grumbler said:

jaceyboy said:

VNX said:

jaceyboy said:

Can someone tell me the why you get less interest for monthly interest please?

It’s because the interest compounds. 

Can you explain please?

Lower figure - 'gross' is when they credit the interest every month and you withdraw it. Higher figure - 'AER' id if you leave the interest in the account and it accrues interest. The latter is called 'compounding'. The same if the interest is credited annually (but still calculated daily)
MSE:  How compound interest works

Sorry- just wanted to say that most banks use gross to define the rate you will earn before tax  - both rates are quoted as gross. If you take annual interest the interest is not compounded and is the higher rate quoted. The monthly rate is compounded and therefore quoted at a lower rate - you therefore will earn the same amount of interest with either annual or monthly. 

TiVo_Lad

wiseonesomeofthetime said:

4justice2 said:

Haven't had an email yet, but Ford Money up to 3.84% monthly showing on account (I believe that's 3.91% on annual basis).

I did post it on the No Chat thread, then deleted it after noticing that it was already on page 1 under UpComing section.

Showing as 3.91% AER on Moneyfacts

Only got £1 in mine anyway

Just got the eMail confirming the rise effective today.

Eirambler

I'm not one for chasing every single top rate just to gain another 0.05% or whatever, but the Tandem increase was significant enough a jump from my Investec rate that it made sense to switch it across, especially as I already had a Tandem account sitting with a quid in it. 

Hard to keep up at the moment though, the cash only stayed in Investec for 19 days and given the continued upward pressure on rates it might well be a similar story with Tandem.

2010

patpalloon said:

Marcus 3.75%

Surprise, surprise,
Marcus does this on a regular basis, just before the BoE meeting.
But this is their late reaction to the increase that the BoE made over a month ago.

Could even be / should be a .5% increase in rates tomorrow.