The Top Easy Access Savings Discussion Area

Rollinghome

BooJewels said:

Rollinghome said:

NameWithheld said:

I prefer monthly over annual for taxable interest because at the moment I have a not to exceed target of £1000 taxable interest per tax year. This is partly because it is the maximum I can get without paying tax, and partly because having a target makes it easier to budget how much income to salary sacrifice to ensure that my overall taxable income remains in the 20% tax band. Having monthly interest on accounts that have rapidly changing rates and balances makes the target easier to track.

Any excess savings goes in an ISA at BR - 0.9%. That pays annually, but that doesn't matter

As I said earlier, there can be tax reasons why it might be preferable to maximise your earnings in one year rather than the next. That could be done with an annual interest account, but it might avoid doing the sums and closing accounts, so I could understand that.

What I'm curious about is why someone would put money into an ISA at 0.90%, when it could go into an MMF at around SONIA, or into a taxable account paying 5.00% or so which would still be more than 0.9% after tax. Or perhaps, depending on circumstances, into an annual account that would pay interest the following year?

I think they mean that it's at 0.9% below the Base Rate - like my Skipton BR Tracker account.

Apologies, I was too slow @BestSeagull beat me to it.

Ah, that makes more sense, thanks.  I didn't have my reading specs at the time, and having had cataracts removed recently anything closer than the other side of the room can be bit of a blur.

Rollinghome

europa said:

Rollinghome said:

grumbler said:

Rollinghome said:

flobbalobbalob said:

Rollinghome said:

Justsayit7 said:

Cynergy not doing monthly interest are missing a trick. 4.80%

Could be, but with banks like Cynergy offering new accounts after 11 days, any serious rate hoppers opting for monthly interest would be losing a smidgeon if they kept switching accounts.  

When an annual account is paying 4.80%, a monthly version would only pay 4.70% after a month.  The monthly rate will only match the annual rate if closed on an anniversary.

But then I never understood why anyone would want monthly interest from an easy access account. For a one or more years fixed term I do understand.

4.8% AER pays exactly the same per day as 4.7% monthly . Both accrue the same interest daily and nothing to do with an aniversary.

You clearly don't understand what AER means do you?  I'll give you a clue, it means annual equivalent rate, not daily equivalent rate.

An account paying 4.7% interest monthly will pay a daily applied rate of 4.7%. Compounded each month that will give you the equivalent of 4.8% (AER) after 12 months, and only after 12 months.  If you close the account at one month there will be no compounding so you will only get 4.7%.  You will only get 4.8% AER if held for a full year or following anniversaries.

 '4.8% annual' will pay a daily applied rate of 4.8%  No matter when the account is closed, you will still get 4.8% AER.
If that isn't clear, you need to try googling.

I'm not convinced. Can you google and post a reliable proof, preferably with an example of calculation?

And even if what you say is true, I don't see any significant difference for 4.7% and 4.8%.

1.048^(1/12) = 1.00391

4.7/12 = 0.392

Nope sorry. I've wasted enough time on this already.  It's your money and if you still don't get it, you don't get it. DYOR.

Andy's point above is completely right too.  If you open the Cynergy account with 4.8% AER annual interest, you'd get more than that if you closed the account and so compounded early. Always assuming the new account paid the same rate or better.

We aren't talking big numbers here, unless a very large sum is held in the account.  The applied rate for monthly is just 0.10% lower, but interest received will be a little bit lower if held for less than 12 months or another anniversary of the account.  Annual Equivalent Rate means you get that rate if held for a year.

This is incredibly useful info. I am relatively savvy with these things, and even i thought monthly interest (with the same AER) was equivalent regardless of when the money is withdrawn. So many thanks for alerting me and others to this important anomaly !

That's good.  It's not a lot of money to worry about unless the balance is large but just as well in our pocket as in the bank's.  And it might be why so many banks are offering monthly only accounts now.

Rollinghome

martinm1 said:

Does anyone know how on android as soon as i move away from the tandem app without logging out, i need to request a new code by manually putting in my phone number in each time

It's happened to me a few times but haven't noticed a pattern.  Could it be after we've been out of the house and used our phone in a different location? If not, then I don't understand how it adds to security but assume they think it does.

SonOfPearl

bundoran said:

refluxer said:

Post Office Online Saver (Issue 68) @ 4.70% (includes a bonus rate of 3.15% for 12 months)

I'm presuming this is pretty recent, as it isn't showing on the comparison sites yet.

https://www.postoffice.co.uk/savings-accounts/online-saver?

It's just a shame that they are so utterly useless. 

Can anyone explain why the Post Office has such a bad reputation on this forum? I've seen lots of forum members commenting that they don't like them, but I've never read anything specific about why. I've had Online Saver accounts with them in the past, and I've just opened this new one again. The website is simple, but it works well for me. Is it their customer service that is poor rather than the website? I just want to know what to look out for! 

masonic

grumbler said:

Rollinghome said:

flobbalobbalob said:

Rollinghome said:

Justsayit7 said:

Cynergy not doing monthly interest are missing a trick. 4.80%

Could be, but with banks like Cynergy offering new accounts after 11 days, any serious rate hoppers opting for monthly interest would be losing a smidgeon if they kept switching accounts.  

When an annual account is paying 4.80%, a monthly version would only pay 4.70% after a month.  The monthly rate will only match the annual rate if closed on an anniversary.

But then I never understood why anyone would want monthly interest from an easy access account. For a one or more years fixed term I do understand.

4.8% AER pays exactly the same per day as 4.7% monthly . Both accrue the same interest daily and nothing to do with an aniversary.

You clearly don't understand what AER means do you?  I'll give you a clue, it means annual equivalent rate, not daily equivalent rate.

An account paying 4.7% interest monthly will pay a daily applied rate of 4.7%. Compounded each month that will give you the equivalent of 4.8% (AER) after 12 months, and only after 12 months.  If you close the account at one month there will be no compounding so you will only get 4.7%.  You will only get 4.8% AER if held for a full year or following anniversaries.

 '4.8% annual' will pay a daily applied rate of 4.8%  No matter when the account is closed, you will still get 4.8% AER.
If that isn't clear, you need to try googling.

I'm not convinced. Can you google and post a reliable proof, preferably with an example of calculation?

And even if what you say is true, I don't see any significant difference for 4.7% and 4.8%.

1.048^(1/12) = 1.00391

4.7/12 = 0.392

Only gross rates should be used for interest calculations. The AER is a theoretical figure with the exception that in the case of annual interest, AER = gross rate. In the example of Oxbury, you use the gross rate of 4.70%pa for monthly or 4.80%pa for annual, per day these are 0.01288% and 0.01315% respectively.

If you open an account with £10k on 1st August and close it on the 1st September, you'll receive £10,039.91 and £10,040.76 respectively (rounding down in each case)

If you open an account with £10k on 1st August and close it on the 1st October, you'll receive £10,078.70 and £10,080.22 respectively.

The calculations would be 10,000 x (1 + [0.047 x daysinmonth1 / 365]) x (1 + [0.047 x daysinmonth2 / 365]) x ...

and for annual interest 10,000 x (1 + [0.048 x daysinyear / 365]) x ...

Only if you kept a static sum deposited for a whole number of years would the interest earned be equal. Any fraction of a year would result in annual interest generating more interest due to the increased gross rate, which is only caught up by compounding from monthly interest by the end of a year. Receiving any annual interest earlier than the anniversary of account opening would skew returns in favour of annual.

martinm1

gsmh said:

Stargunner said:

martinm1 said:

Does anyone know how on android as soon as i move away from the tandem app without logging out, i need to request a new code by manually putting in my phone number in each time

It also logs you out on Iphone, but because I log in by Face ID it only takes a couple of seconds for the app to log back in. It is the same for the Santander app, but other apps like Nat West keep you logged in if you move away snd go back to the app.

@martinm1 is referring to how his phone doesn't do that, it goes back to the first stage when you need an SMS code. I use Android and mine does what your iPhone does, @Stargunner, it allows me back in with the usual biometrics - in your case FaceID, in my case a fingerprint.

@martinm1 try going to App Battery Usage for the Tandem app and verify it is 'optimised' rather than 'restricted'. What you see shouldn't be happening. Which Android phone do you have?

Had to uninstall the app.  Now reinstalled works fine again.  It's an oppo android.

refluxer

SonOfPearl said:

bundoran said:

refluxer said:

Post Office Online Saver (Issue 68) @ 4.70% (includes a bonus rate of 3.15% for 12 months)

I'm presuming this is pretty recent, as it isn't showing on the comparison sites yet.

https://www.postoffice.co.uk/savings-accounts/online-saver?

It's just a shame that they are so utterly useless. 

Can anyone explain why the Post Office has such a bad reputation on this forum? I've seen lots of forum members commenting that they don't like them, but I've never read anything specific about why. I've had Online Saver accounts with them in the past, and I've just opened this new one again. The website is simple, but it works well for me. Is it their customer service that is poor rather than the website? I just want to know what to look out for! 

They do seem to have a poor reputation - it'll be the usual issue just like you get with online reviews where people are much more likely to make negative comments than praise. 

I don't have any accounts with the Post Office at the moment but, like you, I've had Online Savers in the past and never had an issue. The online banking website is simple but functional - payments in and out can take a while, but no worse than some of the other 'next working day' banks.

In terms of customer service, I only had to contact them once during the few years I held a couple of their accounts and that was to request an interest certificate for the last account that I closed. I got through to speak to a human fairly quickly and received the requested certificate through the post a week or so later which was as expected considering that was from Ireland.

Eirambler

If the Post Office banking services are still being operated by Bank of Ireland that alone would be enough to convince me to steer clear. BoI are a dreadful banking institution in general.

Barkin

Eirambler said:

If the Post Office banking services are still being operated by Bank of Ireland that alone would be enough to convince me to steer clear. BoI are a dreadful banking institution in general.

Which is exactly the kind of comment that prompted the previous question.

A scathing "they're carp", without saying why... 

Stargunner

If the Post office banking service is any resemblance of the Royal mail postal service I will be keeping well away. 😂😂