Regular Savings Accounts: The Best Currently Available List!

AmityNeon

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.

jameseonline

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?

flaneurs_lobster

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% 8% compounded annually.

Special_Saver2

Hi Everybody,

There is nothing that I can see to change for the first page of this thread.

I will do the next update within the next 2 weeks.

SS2

---

For those new to this thread, the first few posts are regularly updated and are on the first page
https://forums.moneysavingexpert.com/discussion/6106986/regular-savings-accounts-the-best-currently-available-list/p1

surreysaver

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. 

guli

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. 

By your flawed logic, all variable rate savings account are inaccurate too as they don’t guarantee you’ll be getting the advertised rate in a particular year

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.