Regular Savings Accounts: The Best Currently Available List!

AmityNeon

surreysaver said:

flaneurs_lobster said:

jameseonline said:

AmityNeon said:

surreysaver said:

jameseonline said:

surreysaver said:

jameseonline said:

Opened the 7.85% (sorry you cant call it 8% when it doesn't even last a year) 6 month Principality Regular Saver & funded, probably going to close my 5.5% Regular pretty much end of next month

That was my thought. There's no compounding, as the interest is only paid once. Where do they get 8% from?

It's the AER but it isn't because the account doesn't last for a year, just seems misleading to include that % to me.

When you go to your list of Principality accounts list it shows up as 7.85% though.

Even if it lasted a year it still wouldn't be 7.85%, assuming they paid the interest at the end

It's 8% AER because the account lasts for six months and there are two six month periods in a year, so 7.85% gross paid twice a year would compound to 8%.

They include the AER to follow regulations, but the gross rate is the rate of interest paid.

Does the account pay out twice a year though?

As you realise, no.

The clue is in the acronym, Annual EQUIVALENT Rate, if this account were to run for 12 months (which it doesn't) then the rate is equivalent to an account paying 8% compounded annually.

But its not equivalent to 8% a year, as they don't guarantee you'll be able to keep the money plus interest earning 7.85% after the account's matured.

The AER is correct; the account can't achieve it, but that doesn't mean Principality can just publish a different figure. The AER is not a rate providers actually offer; it's a regulatory requirement designed to assist in the comparison of different financial products, but it has its limitations.

What actually happens in practice, and what providers state explicitly in their terms, is that interest is calculated daily at the gross rate.

Stargunner

surreysaver said:

flaneurs_lobster said:

jameseonline said:

AmityNeon said:

surreysaver said:

jameseonline said:

surreysaver said:

jameseonline said:

Opened the 7.85% (sorry you cant call it 8% when it doesn't even last a year) 6 month Principality Regular Saver & funded, probably going to close my 5.5% Regular pretty much end of next month

That was my thought. There's no compounding, as the interest is only paid once. Where do they get 8% from?

It's the AER but it isn't because the account doesn't last for a year, just seems misleading to include that % to me.

When you go to your list of Principality accounts list it shows up as 7.85% though.

Even if it lasted a year it still wouldn't be 7.85%, assuming they paid the interest at the end

It's 8% AER because the account lasts for six months and there are two six month periods in a year, so 7.85% gross paid twice a year would compound to 8%.

They include the AER to follow regulations, but the gross rate is the rate of interest paid.

Does the account pay out twice a year though?

As you realise, no.

The clue is in the acronym, Annual EQUIVALENT Rate, if this account were to run for 12 months (which it doesn't) then the rate is equivalent to an account paying 5% compounded annually.

But its not equivalent to 8% a year, as they don't guarantee you'll be able to keep the money plus interest earning 7.85% after the account's matured. 

That is irrelevant, The AER is still 8.0%

flaneurs_lobster

Stargunner said:

surreysaver said:

flaneurs_lobster said:

jameseonline said:

AmityNeon said:

surreysaver said:

jameseonline said:

surreysaver said:

jameseonline said:

Opened the 7.85% (sorry you cant call it 8% when it doesn't even last a year) 6 month Principality Regular Saver & funded, probably going to close my 5.5% Regular pretty much end of next month

That was my thought. There's no compounding, as the interest is only paid once. Where do they get 8% from?

It's the AER but it isn't because the account doesn't last for a year, just seems misleading to include that % to me.

When you go to your list of Principality accounts list it shows up as 7.85% though.

Even if it lasted a year it still wouldn't be 7.85%, assuming they paid the interest at the end

It's 8% AER because the account lasts for six months and there are two six month periods in a year, so 7.85% gross paid twice a year would compound to 8%.

They include the AER to follow regulations, but the gross rate is the rate of interest paid.

Does the account pay out twice a year though?

As you realise, no.

The clue is in the acronym, Annual EQUIVALENT Rate, if this account were to run for 12 months (which it doesn't) then the rate is equivalent to an account paying 5% compounded annually.

But its not equivalent to 8% a year, as they don't guarantee you'll be able to keep the money plus interest earning 7.85% after the account's matured. 

That is irrelevant, The AER is still 8.0%

Exactly, it's the RATE that's equivalent, not the final gross amount earned. It's a measure of "how fast" the interest accumulates.

masonic

surreysaver said:

flaneurs_lobster said:

jameseonline said:

AmityNeon said:

surreysaver said:

jameseonline said:

surreysaver said:

jameseonline said:

Opened the 7.85% (sorry you cant call it 8% when it doesn't even last a year) 6 month Principality Regular Saver & funded, probably going to close my 5.5% Regular pretty much end of next month

That was my thought. There's no compounding, as the interest is only paid once. Where do they get 8% from?

It's the AER but it isn't because the account doesn't last for a year, just seems misleading to include that % to me.

When you go to your list of Principality accounts list it shows up as 7.85% though.

Even if it lasted a year it still wouldn't be 7.85%, assuming they paid the interest at the end

It's 8% AER because the account lasts for six months and there are two six month periods in a year, so 7.85% gross paid twice a year would compound to 8%.

They include the AER to follow regulations, but the gross rate is the rate of interest paid.

Does the account pay out twice a year though?

As you realise, no.

The clue is in the acronym, Annual EQUIVALENT Rate, if this account were to run for 12 months (which it doesn't) then the rate is equivalent to an account paying 5% compounded annually.

But its not equivalent to 8% a year, as they don't guarantee you'll be able to keep the money plus interest earning 7.85% after the account's matured. 

It's equivalent to 8% annualised. If after the first 6 months you can find another equivalent account on the market then your money will achieve an 8% return over 12 months. Otherwise your realised return over the whole year will be higher or lower. That doesn't mean the rate of return over the first 6 months was not 8% AER. However, it would be less than 8% if interest was paid after 12 months (that's the scenario where it would be 7.85%). 

The AER figure correctly indicates it would be better to use this account for the first 6 months rather than a theoretical one that pays 7.85% interest annually. If, after 6 months you moved the balance from one to the other, you'd get a little more interest than if you held the money in a 7.85% annual interest account for the whole year.

Only fixed rate accounts with a term of at least one year have a contractual guarantee that the specified AER will be achieved as a realised return.

qbadger

@Special_Saver2, not sure how popular this request might be - would you be willing to entertain the idea of having a separate "No Chat" version of this thread for regular savers?

ThePirates

qbadger said:

@Special_Saver2, not sure how popular this request might be - would you be willing to entertain the idea of having a separate "No Chat" version of this thread for regular savers?

Would be useful!

nottsphil

flaneurs_lobster said:

jameseonline said:

AmityNeon said:

surreysaver said:

jameseonline said:

surreysaver said:

jameseonline said:

Opened the 7.85% (sorry you cant call it 8% when it doesn't even last a year) 6 month Principality Regular Saver & funded, probably going to close my 5.5% Regular pretty much end of next month

That was my thought. There's no compounding, as the interest is only paid once. Where do they get 8% from?

It's the AER but it isn't because the account doesn't last for a year, just seems misleading to include that % to me.

When you go to your list of Principality accounts list it shows up as 7.85% though.

Even if it lasted a year it still wouldn't be 7.85%, assuming they paid the interest at the end

It's 8% AER because the account lasts for six months and there are two six month periods in a year, so 7.85% gross paid twice a year would compound to 8%.

They include the AER to follow regulations, but the gross rate is the rate of interest paid.

Does the account pay out twice a year though?

As you realise, no.

The clue is in the acronym, Annual EQUIVALENT Rate, if this account were to run for 12 months (which it doesn't) then the rate is equivalent to an account paying 5% compounded annually.

1. It's not an acronym.
2. It's 8%.

masonic

qbadger said:

@Special_Saver2, not sure how popular this request might be - would you be willing to entertain the idea of having a separate "No Chat" version of this thread for regular savers?

The easiest option would be to follow the precedent of Easy Access and make this thread the "No chat" version and use the official MSE regular savings article discussion thread as the discussion thread. That other thread has been dormant since early 2021.

Section62

masonic said:

qbadger said:

@Special_Saver2, not sure how popular this request might be - would you be willing to entertain the idea of having a separate "No Chat" version of this thread for regular savers?

The easiest option would be to follow the precedent of Easy Access and make this thread the "No chat" version and use the official MSE regular savings article discussion thread as the discussion thread. That other thread has been dormant since early 2021.

Regular savers seem generally to have more restrictions and/or quirks compared to EA accounts - details such as "can a 13th payment be made" sometimes only emerge after some lengthy discussion.  So I think a "No chat" thread would need a lot of work doing to it (by those taking responsibility) to make sure each entry is sufficiently informative, accurate, and not misleading.

Or you just have a bare list of accounts, which is what the first few pages of this thread are, and tell people they should read the 'chat' thread to fully appreciate the T&C's and eligibility requirements.

There's also the issue (which invariably happens when a specific thread is started for one RS account) of having duplication between threads, and having to read both of them to get the fuller picture.

The consensus - perhaps illustrated by the long dormancy of the 'official' discussion thread - appears to be that this thread works reasonably well with people self-policing the amount of 'chat' they add.  I'm sure the idea of people using the official discussion thread has been put forward before, only for everyone to revert to the status quo.  If it works for the majority (which arguably it has for many years) then why try fixing it?

Perhaps an alternative might be for someone who finds the chatting bothersome to start their own "No chat" parallel thread, and then see how that one develops?

Bottom line, one person's perception of "chat" could be someone else's valuable titbit of information.

Nick_C

This thread is great as it is.  People simply need to stop posting personal anecdotes and off topic discussion that adds nothing to the key information.