TSB Monthly Saver still 2%

badger09

MACKEM99 said:

ColdIron said:

MACKEM99 said:

So if you add up 2%, 11/12 of 2%, 10/12 of 2% all the way down to 1/12 of 2% and then divide the total by 12 you are getting 1%.

You're not the first, and won't be the last, to make this mistake. It comes up regularly. Every pound you put in will be earning 2.00% AER but not every pound will be there for a year. Rather than thinking that you are getting a lower rate than they are actually paying you it is more helpful to think of it in terms of the advertised rate multiplied by the average balance as that is the reality of what is happening

If you want a quick ready reckoner try this - the monthly deposit * the rate * 6.5

So for TSB this would be 250 * 0.02 * 6.5 = £32.50

There are also lots of people who see 2% and think that is what it achieves.  ..................................

Presumably the same people who think a bank will pay interest on money which is not even in an account

ColdIron said:

Everybody is entitled to be wrong

But some are more entitled than others

MACKEM99

If I put £100 per month into this account how much interest do I get after 1 year

glider3560

MACKEM99 said:

If I put £100 per month into this account how much interest do I get after 1 year

https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/#regsavercalc

MACKEM99

glider3560 said:

MACKEM99 said:

If I put £100 per month into this account how much interest do I get after 1 year

After saving £100.00 a month for 1 year and 0 months, you will have £1,212.96 in savings, meaning you've earned £12.96 interest.

ColdIron

MACKEM99 said:

If I put £100 per month into this account how much interest do I get after 1 year

2% pa for every pound

MACKEM99

ColdIron said:

MACKEM99 said:

If I put £100 per month into this account how much interest do I get after 1 year

2% pa for every pound

2% of £1200 = £24.

ColdIron

pa = Per Annum

You won't get any interest for money not deposited, it's not hard to grasp

MACKEM99

ColdIron said:

pa = Per Annum

You won't get any interest for money not deposited, it's not hard to grasp

Not hard at all 11/12 of if wont be in the account for a year.

glider3560

MACKEM99 said:

ColdIron said:

MACKEM99 said:

If I put £100 per month into this account how much interest do I get after 1 year

2% pa for every pound

2% of £1200 = £24.

The account will only contain £1200 for one month.  You only earn interest on money actually in the account, just like every savings account.

RG2015

This is a bit like calculating the value of pi. It goes on forever.