Regular Savings Accounts: The Best Currently Available List!

ColdIron

subjecttocontract said:

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

About that but you are forgetting that you have an extra £200 in the account for a year, worth an extra £16 ish

subjecttocontract

I suspect there are some who think that making that 13th payment is so worthwhile when, the total interest paid out on the account has little to do with that 13th payment.

ColdIron

Correct. The 13th payment in isolation is not the important factor

The critical thing is that these 'calendar month' type RSs (that allow a 13th payment) enable you to gain a years worth of interest on the monthly amount as long as it is opened at the end of the month

If you open it at the start of the month it's pretty much worthless

zagfles

snow62 said:

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.

No, it's £1.31

£200*0.08*30/366 

(and no, they don't compound interest daily, or monthly, so this is the right formula to use).

But all irrelavent anyway. There's nothing special or devious about making 13 payments rather than 12. With this account you could make 100 payments if you really wanted to. The rules are that you can't increase the account balance by more than £200 every calendar month. You can even make withdrawals and replace those withdrawals the same calendar month. Though the interest rate drops if you make more than 3 withdrawals.

The thing which I guess is of interest to most people is not "how much extra interest do I get from making payment no. 13" but "how much extra interest do I get compared to the way other RS accounts work (eg Santander, FD). The answer to which is £16 (if you get timing right). 

But for those who for some reason are specifically interested in the interest earned on payment no.13, the answer is above. I'm sure they'll find it useful 

happybagger

Stargunner 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?

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.

Which you do anyway. The last payment is the one that is extra.

happybagger

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.

Which you can do regardless. It's the final one that is the "extra" one.

Anyways, given the tiny amount of interest concerned (in either scenario), that's me done on the subject.

allegro120

subjecttocontract said:

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

Depends on the dates, monthly allowance and the interest rates.  Whatever it might be, there's no harm in taking the advantage of 13th payment when it is allowed.

schiff

This thread is constantly being diverted on to tangents with no real connection to breaking news.
I imagine it will continue like this now that new RSs are unlikely thanks to the BoE decision.

Altior

I suspect some people are looking at it the wrong way. The '13th' payment is irrelevant. What is relevant is that if you used the workaround, you're effectively pulling forward the remaining payments after the first one, by almost a month. The overall 'effect' of that is similar to having a bonus payment at the beginning. 

The question for me would be is that risking the potential wrath of Nationwide. Almost certainly not, but the modest upside isn't worth the risk, even if it's a well worn tactic. 

allegro120

schiff said:

This thread is constantly being diverted on to tangents with no real connection to breaking news.
I imagine it will continue like this now that new RSs are unlikely thanks to the BoE decision.

You never know, the market is full of surprises. Nobody expected Nationwide, which has been useless for savers for a long time, to come up with 8% RS. Going back few years, YBS launched 5% loyalty RS when most RS offers were below 2.5% and there was no indication of BoE rates going up any time soon.