The Top Easy Access Savings Discussion Area

intalex

Futuristic said:

ranciduk said:

HSBC online saver 

You will soon get 4% on balances upto £50k, instead of £10k

Basically copying changes to FD as well: https://www.firstdirect.com/savings-and-investments/savings/

FD:
Bonus Savings Account is increasing on 30 June to 4.00% AER (3.93% gross) from 3.50% AER (3.47% gross) (including bonus) on balances up to £50,000 (previously up to £25,000)

Just saw the yahoo link mentioned in there. 

Did they copy the Regular Saver rate of 7.00%??

Barkin

PG2005 said:

Email from Paragon triple access issue 12 increased to 4.25 from 5th July 

Iss 11 too. 

S_uk

The process of receiving a letter/code from Newcastle BS that you then use to authenticate your nominated account online to allow withdrawals appears to be exactly the same process as when I opened a Ford Money account. Ford explain this clearly on their website so I'm not sure why Newcastle don't?

spider42

grumbler said:

cwep2 said:

grumbler said:

cwep2 said:

grumbler said:

No, I don't think so. Annual interest is calculated daily at 4.22%. After compounding it makes 4.3%:

(1+0.0422/365)^365-1 = 0.043

As simple as that.

You don't earn interest on the interest until it's paid (monthly). 

Again, I think you are mistaken. It's always calculated daily, but credited either monthly or annually.
That said, daily compounding within one month is negligible:
(1+0.0422/12)^12-1 = 0.043026
(1+0.0422/365)^365-1 = 0.043101

The same for all credit products (CCs, overdrafts, loans) - calculated daily, added monthly or annually (or on closure).

AER has to be quoted to 2 decimal places (by law).
If they paid interest at 4.22% gross and it was compounding daily, then as per your own calculation the AER on the account would be 4.31% not 4.30%.

Possibly, you are right.
4.22% seems to be the gross 'monthly' rate calculated from the base 4.30% figure:
(1.043^(1/12)-1)*12 = 4.2175%
I still see no grounds for claiming that 

"The result is the same if you keep the account open for 12 months and the annual interest is paid in 12 months time.  If you close earlier, you'd get a bit more interest opting for annual interest because you'd get the annual interest rate on closure. "

Maybe because 4.22 > 4.2175 if they really use the former for calculations.

The grounds for claiming that you'd get a bit more interest by opting for annual interest if you close the account earlier are that it is a mathematical fact. With monthly interest, you'd get (1.043^(1/12))^6 times your original balance if you close after 6 months, in other words £10,212.74 per £10,000 deposited. With annual interest, you would have £10,215.00.

The sums are even easier of you look at closing after 1 month instead of 6. With monthly, you'd get 4.22%/12. With annual, you'd get 4.3%/12. Annual is obviously better in this example, without needing to consider compounding or do any calculations.

It is nothing to do with rounding of interest rates, it is just maths. The above calculations involve no rounding of the interest rates at all (although I've rounded the monthly balance after 6 months up to the nearest penny).

The way the monthly interest is calculated assumes that you will have a constant balance, that the interest will compound for a full year, that the interest rate will remain constant, and that the annual interest is credited 12 months after opening. If any of those assumptions don't apply in practice, then monthly and annual interest will not result in the same amounts of interest being paid (although the differences are likely to be pretty small).

For example:

• If you close an account on any date other than the anniversary of opening, annual will result in more interest (for example, see the calculation above if closed after 6 months). If you 'self compound', by choosing annual interest, close the account after 6 months and open another for a further 6 months and then close again, you'd improve the AER from 4.3% to  4.346%. Probably not worth doing for most (including me), but on a £10,000 balance you'd make an extra £4.62 per year. 
• If the account pays interest on a fixed date instead of on the anniversary of opening, annual will result in more interest. E.g. suppose the Newcastle account paid interest every 31 July and not on the anniversary, and you open the account on 1 July. At the end of July, with monthly, you've received 4.22%/12 (or x31/365 to be more precise). With annual you've received 4.3%/12 (or x31/365). So on 31 July, you have a larger balance with annual interest. Roll that forward, and you will still have a higher balance on every 31 July thereafter, as the balance under both methods will then have increased by 4.3% by each 31 July.
• If the interest rate changes during the 12 months (either up or down), annual will result in slightly more interest than monthly.
• If the balance increases over the 12 months, annual will result in more interest. Lets suppose you open an account today with £0.01, and then deposit £9,999.99 on day 365. With monthly, you earn interest for 1 day at 4.22% on £10,000, but have not actually benefitted from any compounding, as you've not received any interest during the first 11 months. With annual, you earn interest for 1 day at 4.3%. So again, annual is slightly better. That is a very extreme example, but any additional deposits made during the 12 months, rather than on day 1, will earn more interest under annual (same principle as bullet point 2, as you don't have to wait the full 12 months before you receive the interest). You are receiving the full annual rate of interest, but aren't having to wait a year to get it.
• Conversely, if the balance decreases over the 12 months, you would earn more under monthly.

The main advantage from my perspective of getting annual interest is that it delays the payment of tax to HMRC for 12 months on part of the interest. Open the Newcastle account and select monthly, and 9 months of interest fall in the current tax year, and 3 next tax year. With annual, all 12 months are paid next tax year. Interest over 9 months is roughly 3.225% (haven't calculated proper compounding), so for a higher rate taxpayer, that's 1.29% of your balance that you would need to hand over to HMRC 12 months earlier than necessary. Better to keep it yourself for an extra 12 months and earn further interest on it.

SteveG2010

moi said:

SteveG2010 said:

I have opened a Newcastle BS Tracker online and transferred some money in. There is no way to withdraw money from the account, neither via the website nor via the Android App. There just isn't a button, link or menu item to do it. All I can do is show a statement. There's something seriously wrong with their IT.

Do you not have the huge "Authenticate your nominated bank account" message? Like cymruchris said, you need the code in the post before you can withdraw to your nominated account.

Not had that, but I'll give it a few days and try again. Clearly, not being able to withdraw money that I have already put in is not the normal state of affairs, but a message on screen that I can't do it, rather than just not having any visible ability to do so (no button, link, menu item at all) is an obvious improvement that their website and app desperately needs.

moi

SteveG2010 said:

moi said:

SteveG2010 said:

I have opened a Newcastle BS Tracker online and transferred some money in. There is no way to withdraw money from the account, neither via the website nor via the Android App. There just isn't a button, link or menu item to do it. All I can do is show a statement. There's something seriously wrong with their IT.

Do you not have the huge "Authenticate your nominated bank account" message? Like cymruchris said, you need the code in the post before you can withdraw to your nominated account.

Not had that, but I'll give it a few days and try again. Clearly, not being able to withdraw money that I have already put in is not the normal state of affairs, but a message on screen that I can't do it, rather than just not having any visible ability to do so (no button, link, menu item at all) is an obvious improvement that their website and app desperately needs.

I agree it would be far more helpful to actually have the withdraw button showing, then giving a message. In fact I was looking for it (not to withdraw yet, I only put £1 in, just to get the feel of their site.) 

tsmiggy54

Anyone know how long, it is before the initial deposit appears in the Newcastle account?

I transfered mine using the reference number today, but nothing yet

Thanks

2010

tsmiggy54 said:

Anyone know how long, it is before the initial deposit appears in the Newcastle account?

I transfered mine using the reference number today, but nothing yet

Thanks

Tomorrow.

I sent initial yesterday and it showed today.
I also sent more payments today and they are showing in the account now.

iNeed2P

tsmiggy54 said:

Anyone know how long, it is before the initial deposit appears in the Newcastle account?

I transfered mine using the reference number today, but nothing yet

Thanks

Opened my account and paid in initial payment. Both yesterday pm

allegro120

fabsaver said:

fabsaver said:

Mr._H_2 said:

jaceyboy said:

Just applied but they are asking for additional proof of identity, has anyone managed to do this electronically rather than postal?

Me too, which is odd because I'm usually easily verified electronically. One would imagine that if there were a means to provide the documentation electronically, they would provide those details in the application confirmation email. However, the only method provided is to post physical copies to them (how quaint!)

Same here. Very odd as I open lots of accounts and always get verified electronically.

I can only think of one occasion in the last few years where the electronic checks failed and I was asked to provide id. However it was just a temporary blip because I'd applied in the early hours. On that occasion I reapplied during working hours and the account was opened instantly.

Unless they allow documents by email it's really not worth the effort. It's very likely the rate will be beaten soon anyway. Their loss.

Just applied again online for the Newcastle base rate tracker, as I've noticed a few comments saying accounts successfully opened today.

It worked! All the same details as yesterday but this time account opened straight away with no id documents needed.

It seems there may have been some sort of glitch with the electronic verification yesterday. Perhaps due to the volume of account applications. For anyone else who was asked to post proof of id it's worth trying another online application.

Thank you! Did it again just now and it worked without "send us ID" message.  Deposited £1, downloaded the app and now awaiting for user ID and instructions - I guess that will be sent by post.