Regular Savings Accounts: The Best Currently Available List!

snow62

By my calculations, that extra £200 at 8% will at most earn £1.27 - if it's in for 30 days before the account matures.  i.e. about 4p per day.

zagfles

snow62 said:

By my calculations, that extra £200 at 8% will at most earn £1.27 - if it's in for 30 days before the account matures.  i.e. about 4p per day.

No, if you time it right the extra £200 is in for almost a year, not a month. So about £16 extra at 8%

If you compare:

a) Investing £200 on the same date every month for 12 months, with

b) Opening the account on the last day of the month and investing £200 then, followed by 12 further payments on the 1st of each month

Then you have an extra £200 in the account for nearly all of the year. The account starts at £200 the day you open it, then one day later it's £400. Then £200 more each month till the last month.

If you open the account mid way through the month then the extra £200 is in for roughly half the year, so you'd gain around £8. Assuming again second/subsequent deposits are on the 1st of the month.

happybagger

zagfles said:

snow62 said:

By my calculations, that extra £200 at 8% will at most earn £1.27 - if it's in for 30 days before the account matures.  i.e. about 4p per day.

No, if you time it right the extra £200 is in for almost a year, not a month. 

Surely it is the final (extra) payment that is the extra one? Not the first? Surely the first is made regardless, as if it isn't, the the account hasn't started?

friolento

happybagger said:

zagfles said:

snow62 said:

By my calculations, that extra £200 at 8% will at most earn £1.27 - if it's in for 30 days before the account matures.  i.e. about 4p per day.

No, if you time it right the extra £200 is in for almost a year, not a month. 

Surely it is the final (extra) payment that is the extra one? Not the first? Surely the first is made regardless, as if it isn't, the the account hasn't started?

I would say it is the first. As zagflies explains, instead of only £200, you start out with near enough £400. If you time it right, that is.

ColdIron

subjecttocontract said:

How much extra interest does making a 13th payment provide ?

It depends upon when you make the first payment

If you open it on, say, the 2nd then the final (13th) payment gets 1 day extra interest

If you open it on the 31st the final payment gets 30 days (although the first only gets 1 day). A better way of looking at it is your first month (ish) has £400 instead of £200 and the same for all following months

Stargunner

happybagger said:

zagfles said:

snow62 said:

By my calculations, that extra £200 at 8% will at most earn £1.27 - if it's in for 30 days before the account matures.  i.e. about 4p per day.

No, if you time it right the extra £200 is in for almost a year, not a month. 

Surely it is the final (extra) payment that is the extra one? Not the first? Surely the first is made regardless, as if it isn't, the the account hasn't started?

You are incorrect, You make the 1st psyment on the last day of the month and make the 2nd payment on the 1st of the following month.

zagfles

happybagger said:

zagfles said:

snow62 said:

By my calculations, that extra £200 at 8% will at most earn £1.27 - if it's in for 30 days before the account matures.  i.e. about 4p per day.

No, if you time it right the extra £200 is in for almost a year, not a month. 

Surely it is the final (extra) payment that is the extra one? Not the first? Surely the first is made regardless, as if it isn't, the the account hasn't started?

Depends what you're comparing. If you use the MSE RS calculator or the rule of thumb interest formula from RS accounts of monthly amount x interest rate x 6.5, then you could have an extra £200 for a whole year (almost) over and above. So it's an extra £16.

If you want to compare making the 13th payment in the final calendar month with not making that payment, then you'll get a bit over 4p a day extra as above for the last month. But that's a totally pointless comparison, why wouldn't you make that payment? The rules are quite clear that you can increase the balance by £200 each calendar month, and the account lasts for a year after you open it, that allows 13 payments unless you open the account on the 1st of the month. It's not a loophole or anything, it's the way the account works.

snow62

friolento said:

happybagger said:

zagfles said:

snow62 said:

By my calculations, that extra £200 at 8% will at most earn £1.27 - if it's in for 30 days before the account matures.  i.e. about 4p per day.

No, if you time it right the extra £200 is in for almost a year, not a month. 

Surely it is the final (extra) payment that is the extra one? Not the first? Surely the first is made regardless, as if it isn't, the the account hasn't started?

I would say it is the first. As zagflies explains, instead of only £200, you start out with near enough £400. If you time it right, that is.

We're talking about the extra, 13th, payment.  If you don't add that payment, you miss out on the maximum £1.27 I stated above.  The timing of the first payment, and having virtually £400 to start with, is a separate calculation which can get you around £16 (though subtract what it would have earned elsewhere).  By making the 13th payment you get both amounts (though also subtract what you could have got elsewhere for the 13th payment if looking at the overall benefit).

subjecttocontract

So the answer is .....the 13th payment is worth a maximum of £1.27 interest.

snow62

subjecttocontract said:

So the answer is .....the 13th payment is worth a maximum of £1.27 interest.

Yes!!  As that was what your original question asked.