regular saving 'guidance'

2yeardream

Hi folks - i am a newbie when it comes to posting on social media sites so please go easy. The general summary is that for the next 12 months i am going to save approx £1500 per month - and was wondering where the best place to 'save' this money would be (to gain some interest) - i have done some reading and regular saving accounts seem to be suggested, however due to maximum amount allowed to deposit i would need to open up 3 different accounts. And if my calculations are correct using 3 different accounts 1@2.5.% and 2 @ 2% (max £500 per month on all). I would save £18,000 for the year and earn £390 in interest (1@£150, 2@£120) - does my adding up seem correct and are regular saving accounts about right for my circumstances / maximising my return?
Thanks in advance

Dazed_and_confused

You have a couple of fundamental issues with your figures.

You can only pay in £500 per month. So you are massively overstating the interest you will earn as your figures appear to be based on getting interest on the full £6,000 from day one i.e. £6,000 x 2.5% = £150.

In reality you will earn more like £75 from that one.

Month one will be £500 x 2.5% = £1.04
Month two will be £1,000 x 2.5% = £2.08

On the plus side you haven't factored in the interest from your fourth account where the money will sit before being transferred to the regular savers.

Month one might be £16,500 x 1.35%* = £18.56
*I think Marcus is paying 1.35% but you might be able to do better.

oli356

Use the calculator here https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/?&_ga=2.109812677.1175389032.1579820252-1034746845.1563018861#calculator
As you're drip feeding in the money you gain interest on only the first £500 for month 1,£1200 month 2 etc So £500/month at 2% is like £64.80 according to the calculator.

But then have a look at some of the 2.75% interest accounts on that link, albeit they don't take £500 so you might need more accounts.
With like the Nationwide current account you can earn 5% interest on £2500, so also worth looking at
https://www.moneysavingexpert.com/banking/compare-best-bank-accounts/

redpete

Only the first month's contributions earn a full year's worth of interest. The money you pay in for the last month only earns one month's worth of interest. So the total interest would be about £212.

2yeardream

thanks for the reply folks

Dazed_and_confused

On the plus side you haven't factored in the interest from your fourth account where the money will sit before being transferred to the regular savers.

Month one might be £16,500 x 1.35%* = £18.56
*I think Marcus is paying 1.35% but you might be able to do better.

Ignore that bit of my post, I was thinking you were drip feeding a lump sum, not saving it up as you go along!