The Top Easy Access Savings Discussion Area

crumpet_man

Barkin said:

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... 

"IT" issues
Problems withdrawing and depositing funds (direct debits would stop working)
Account getting locked for no apparent reason
Customer service say it's fixed, try again in 15 minutes but it's not fixed and have to call again

Rollinghome

masonic 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

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.

Thanks masonic. For completeness, and for those who want to squeeze out every last penny, there are times when a monthly account can pay marginally more than the annual equivalent. But only if the account is closed on an anniversary of the opening date.

For example, iirc, RCI had a 1yr fixed term account that paid an applied rate of 4.60% annually or 4.51% monthly, which was the nearest they could get to 4.60% AER to two places.  That should mean that the final payout on the anniversary would amount to 4.604% AER, which I make 40p more on £10k for monthly a/cs. With any EA it's less likely to be closed on the anniversary date.

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it.”
A Einstein

Zaul22

Chip getting dangerously close to the Zopa Zone if they don't increase soon. 

SeriousHoax

Zaul22 said:

Chip getting dangerously close to the Zopa Zone if they don't increase soon. 

Sometimes I've seen them change there Intrest rate's on a Friday.

I'll have a look at my crystal ball tonight.😛

martinm1

SeriousHoax said:

Zaul22 said:

Chip getting dangerously close to the Zopa Zone if they don't increase soon. 

Sometimes I've seen them change there Intrest rate's on a Friday.

I'll have a look at my crystal ball tonight.😛

Tomorrow I will have emptied my chip account, so too late to tempt me back, unless it's a good couple of points above tandem

kaMelo

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! 

If you only hold one savings account then the chances are things will be okay but, as the accounts used to offer funding via direct debit, they were handy to generate DD's for switch offers etc by opening a new one as and when required. This is when things went downhill.

Once you have more than one account under the same login it's like their software can't deal with it and the functionality, change the linked account or make a withdrawal, breaks. The only way to do anything is to call them which opens you up to possibly the most incompetent customer service department I've ever experienced who seem to blame everything else, including the customer, for their own failings.

I don't care what they are offering, the wasted time and frustration is simply not wort it

jak22

If you are lucky enough not to experience these issues and are able to manage a PO account, then, although the large bonus element means the rate will drop significantly after 12 months, it is a useful account to have because when rates eventually start to drop the bonus (3.15% for this issue) acts as a lower limit to the rate.

Withdrawals seem to arrive the second day after you request them.

If you have a current PO issue then its quick and easy to open the new issue online and transfer and close the previous issue gaining a new bonus rate for 12 months.

Tesco also have a large bonus element (3.25%) so the same reason applies - except there's no monthly option and their bonus is a separate payment and you can't easily close previous issues online.

europa

Rollinghome said:

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.

Indeed. If i were a bank, that's exactly what i would do. AER clearly isn't fit for purpose. 

sturgeon

I asked chip before I withdraw and move to Tandem. Reply was:

“With the Bank of England base rate going up constantly, we're starting to see savings rates continue to climb across the market. However, banks can take a little while to pass on this increase to customers as it depends on their circumstances. (e.g. if they need to raise additional capital for lending)

With this in mind, Chip is always working to bring you the best rates available, and the flexibility of our platform means we can partner with different banks, and pick the ones that offer us the best terms. Our aim is to get more banks on our platform and make Chip an easy choice for banks to attract customer deposits, this will in turn lead to improved interest rates for you.

We’re confident that there are going to be more market-leading rates on the table for our savers but we are also fully aware that no savings rate right now is going to get close to inflation, so we'll also be growing our new products in the form of more investment funds, crypto and alternative assets which we'll be announcing more about soon.

Whenever we decide to increase our interest rates, we will promptly notify our users via email and through the app once the changes have been implemented”

Could mean nothing but equally could suggest they need additional funding and cannot increase rates further or certainly can’t be market leading anymore. I’m far from an expert so don’t fully understand, just passing on the info. 

Zaul22

It sounds like a load of waffle that could have a few subtle hints about future plans hidden in it. Chips problem is the IA account is the only thing making them a profit, so they have to keep it competitive. On the other hand the fact that their investment platform is unprofitable does need to be solved at some point, rather than just ignoring it and focusing on the IA. 

It would make sense for them to start doing notice accounts and fixes at some point, but they seem to want to do it by providing 3rd party accounts like the Oaknorth one instead of doing it themselves.