The Top Easy Access Savings Discussion Area

noh

Daliah said:

noh said:

t1redmonkey said:

Is a zopa account quick and easy to open?

It should be but they need to verify your nominated bank account before you can make a deposit. Despite me uploading the required documents immediately they did not verify the linked account until 10 days later and then only after prompting.

They might have more staff processing verification requests now. My Starling account got verified within 90 minutes today. My Santander account didn't need extra verification.

Yes. I suspect that in my case something went wrong and verifying my accounts was just wasn't progressed.

Rollinghome

RG2015 said:

Rollinghome said:

murphydavid said:

Rollinghome said:

Oasis1 said:

I've screwed up on that front. Should have picked monthly so have messaged to ask if I can change.

Ah, but you will get 1.75% instead of 1.74% (1.75% AER) if you move somewhere else after a month or so - which isn't too implausible at the moment.  Maybe enough to buy a few bubbles on your latte. (Pity about any extra tax of course. Could always close and re-open.)

You don't get less or more interest. They just working the math backwards so to speak. The interest is actually calculated daily on a daily rate. The real rate that's used but not stated. That rate is worked out backwards so that you would get the quoted APR if it was in for 365 days.
So if you work backwards from the APR to the monthly rate (or forwards from the daily rate) that will give you a percentage you can quote. Its just meaningless math. You always get the same APR both ways. If you chose monthly you just get more updates and a way to move interest from one tax year to the next.
As I understand it.

murphydavid  I think you may be confusing APR with AER. 

APR, Annual Percentage Rate, is the applied rate, whereas AER is the Annual Equivalent Rate, i.e. the return you would get only if you allowed your monthly interest to compound for a full year.  If you kept the deposit for less than a year, or withdrew the interest each month, then you wouldn't get the AER quoted.

The Shawbrook account pays an applied gross rate of 1.75% APR for annual accounts. The monthly account pays 1.74% APR, which with compounding, gives an AER of 1.75% after one year. . If you keep the account for just a month, as mentioned, there will be no compounding, just the 1.74% gross rate shown.  Whereas for the annual interest account you will get the full 1.75% gross rate, calculated daily, regardless of whether the account is open for a month, a day, or a year. 

Furthermore, if you close an annual account paying say 1.75% gross after less than a year, or between annual interest payments and, if you re-invest the interest received in another account paying a similar rate, you would get further interest on that interest and so potentially get an AER higher than the quoted applied rate.  Not that I suggesting you bother to do that.

I thought APR was the rate used for borrowing, such as on mortgages.

When banks advertise savings rates, they generally use the terms AER and gross.

It is. Just means Annual Percentage Rate whether you pay it to someone or someone pays it to you. Now used for cost of a loan including all extra costs. Gross used to be used only for the rate without tax deducted.when all savings were paid net, tax paid. https://www.investopedia.com/terms/a/apr.asp

Daliah

Having opened a Zopa Smartsaver this morning, I am now a total Zopa fan! It was so easy to set up all the accounts, the app is well designed and easy to use. I needed to contact CS as they had the remnants of an ancient account for me but this was sorted very swiftly and professionally. Pulling money in is a breeze (if I ignore that it took me half an hour for Santander to unblock my account because of the "unusual" transaction), and the Booster accounts are very simple to understand.

I haven't yet tried any withdrawals but I am ever so impressed with them so far. 5 stars.

simoncorkswill1

Atom badly dragging their feet now , Zopa have been very reactive to the rate increases.

cloud_dog

@soulsaver just curious why Chase has dropped off the list when they are paying the same as Marcus (via a bonus) and the other one (I can't remember now)?  

2010

Nobody chasing Chase anymore.

garyelder

Just opened up a zopa account so simple took 5 minutes. Stuck a pound in as test be I. My pot 20 min so it said 

soulsaver

cloud_dog said:

@soulsaver just curious why Chase has dropped off the list when they are paying the same as Marcus (via a bonus) and the other one (I can't remember now)?  

I made an exception for Marcus 'cos it was a new entry and could have been 'news' to some readers... and I try to leave entries 'on' for at least a 'crack of the whip' week before dropping them off.

Rollinghome

Daliah said:

Pulling money in is a breeze (if I ignore that it took me half an hour for Santander to unblock my account because of the "unusual" transaction),

I've found that Santander find anyone withdrawing any sum from their account to be "unusual".   They also like to have their customers verify that they have requested the withdrawal with an automated call, and when they do, lock the account anyway just for luck.  All for 0.75% with a £4pm fee + DD and pay-in hoops to jump through. Santander has become an unusual bank of late.

murphydavid

Rollinghome said:

murphydavid said:

Rollinghome said:

Oasis1 said:

I've screwed up on that front. Should have picked monthly so have messaged to ask if I can change.

Ah, but you will get 1.75% instead of 1.74% (1.75% AER) if you move somewhere else after a month or so - which isn't too implausible at the moment.  Maybe enough to buy a few bubbles on your latte. (Pity about any extra tax of course. Could always close and re-open.)

You don't get less or more interest. They just working the math backwards so to speak. The interest is actually calculated daily on a daily rate. The real rate that's used but not stated. That rate is worked out backwards so that you would get the quoted APR if it was in for 365 days.
So if you work backwards from the APR to the monthly rate (or forwards from the daily rate) that will give you a percentage you can quote. Its just meaningless math. You always get the same APR both ways. If you chose monthly you just get more updates and a way to move interest from one tax year to the next.
As I understand it.

murphydavid  I think you may be confusing APR with AER. 

APR, Annual Percentage Rate, is the applied rate, whereas AER is the Annual Equivalent Rate, i.e. the return you would get only if you allowed your monthly interest to compound for a full year.  If you kept the deposit for less than a year, or withdrew the interest each month, then you wouldn't get the AER quoted.

The Shawbrook account pays an applied gross rate of 1.75% APR for annual accounts. The monthly account pays 1.74% APR, which with compounding, gives an AER of 1.75% after one year. . If you keep the account for just a month, as mentioned, there will be no compounding, just the 1.74% gross rate shown.  Whereas for the annual interest account you will get the full 1.75% gross rate, calculated daily, regardless of whether the account is open for a month, a day, or a year. 

Furthermore, if you close an annual account paying say 1.75% gross after less than a year, or between annual interest payments and, if you re-invest the interest received in another account paying a similar rate, you would get further interest on that interest and so potentially get an AER higher than the quoted applied rate.  Not that I suggesting you bother to do that.

Yes I should have said AER not APR sorry about that.
However I can assure you that Shawbrook compounds interest daily its in there T&Cs section 10. There is daily compounding irrespective of how long you keep the account.
I may be wrong but I believe that daily rate is the same for both options. I also failed to say the obvious that you will get the same interest on both only if when selecting monthly you also select that all interest is to remain in the account.