TSB Monthly Saver interest correct?

No_Name

I've just noticed that, as per TSB's website, their monthly saver pays out £28.33 at 2% when you pay in £250 pcm. I calculated it to be around the £32.50 mark before tax?


Can someone else confirm?


Also, for whatever reason, my application for my forth / fifth RS has been declined as they want me to pop in branch to prove ID - strange, I've never encountered this with them or other banks when applying logged in as exisiting customer - anyone else?


Being a higher rate tax payer, some quick calculations means if I drip-fed into a 1.5% paying account, I would only be just over £4 better off if I went with TSB's 2%. The parking to pop in branch would wipe that £4 off!

Fingerbobs

No_Name wrote: »

Also, for whatever reason, my application for my forth / fifth RS has been declined as they want me to pop in branch to prove ID - strange, I've never encountered this with them or other banks when applying logged in as exisiting customer - anyone else?

I had this with the Saffron Building Society. I've been a member for many years, and opened and shut several accounts with them over that time (including previous RS accounts), but last year they bounced my postal application for a new RS and asked me to go into a branch with ID documents.

eskbanker

No_Name wrote: »

I've just noticed that, as per TSB's website, their monthly saver pays out £28.33 at 2% when you pay in £250 pcm. I calculated it to be around the £32.50 mark before tax?

Can someone else confirm?

The interest earned in regular savers varies according to exactly when deposits are made, and, for whatever reason, TSB have assumed in their calculation in the summary box at https://www.tsb.co.uk/savings/monthly-saver/ that the deposits are made on the 25th of each month:

Based on accounts opened on the first of March, with 12 monthly deposits of £250 made on the 25th of the month(which is the maximum you can pay in each month).

Depositing the monthly contribution at the start of the month (a somewhat more obvious approach!) would increase the interest closer to your figure....

etienneg

No_Name wrote: »

I've just noticed that, as per TSB's website, their monthly saver pays out £28.33 at 2% when you pay in £250 pcm. I calculated it to be around the £32.50 mark before tax?

Can someone else confirm?

Try reading the text on their web site that accompanies the example giving the £28.33 figure.

"Based on accounts opened on the first of March, with 12 monthly deposits of £250 made on the 25th of the month(which is the maximum you can pay in each month)."

Opening an account on 1st March means that it will mature on 1st March the following year. If you don't pay in until 25th, you have wasted 24 days each month when you could have been earning interest.

If you open the account on 1st and pay in £250 on that day, and on 1st of each month thereafter, you maximize the interest and you will get something close to £32.50 over the year.

No_Name

Thanks everyone.



A quick read at work meant I skipped that bit on their illustrative example using 25th as deposit date.

ColdIron

Don't forget that as the account works on a calender month you will likely be able to make 13 deposits

No_Name

Something still isn't quite right - not that it matters as it is a small amount, but intrigued as to how TSB has calculated it.


I've re-calculated and assumed £250 on 25th x 12 months. It's still over the same period and the amount is similar to deposits on 1st of each month. As Coldron's highlighted, some may even benefit from a 13th deposit.

eskbanker

No_Name wrote: »

Something still isn't quite right

Your calculation, it would appear!

No_Name wrote: »

I've re-calculated and assumed £250 on 25th x 12 months. It's still over the same period and the amount is similar to deposits on 1st of each month. As Coldron's highlighted, some may even benefit from a 13th deposit.

As my earlier quote from their website highlights, not only do they assume payments on the 25th but for an account opened on the 1st, so there is an initial 24-day period where the account is empty. As the account is open for a year starting from the opening date, the interest in TSB's scenario is only earned over the remaining 341 days and so can't be equal to that from an account that's funded optimally for the whole year....

DennisTenus

ColdIron wrote: »

Don't forget that as the account works on a calender month you will likely be able to make 13 deposits

I'm probably being stupid, but I don't understand how?

Ed-1

DennisTenus wrote: »

I'm probably being stupid, but I don't understand how?

e.g. open account on 19th March 2019.
Payment 1 19th March
Payment 2 1st April
Payment 3 1st May
Payment 4 1st June
Payment 5 1st July
Payment 6 1st August
Payment 7 1st September
Payment 8 1st October
Payment 9 1st November
Payment 10 1st December
Payment 11 1st January
Payment 12 1st February
Payment 13 1st March
Account matures 18th March 2020.

DennisTenus

It does say 12 monthly payments though not 13 so is that allowed