Regular saver calculator for irregular sums

strawb_shortcake

Pretty much as the title, how do I work out the interest for a regular saver when I haven't saved the same sum each month? 
I know if you save the same amount then you add half the interest. I'm hoping there is a nice easy calculator as I'm rubbish at maths 

eskbanker

In general you can calculate approximate interest by working out the average balance throughout the year and multiplying that by the interest rate - the average balance will typically be about half of the final balance (or six of the monthly payments) if being fed linearly, but if you're paying in different amounts then you immediately have a more complex calculation that doesn't lend itself to simplification.  Is it relatively straightforward to figure out what your average monthly contribution is (and will be)?

Another_Saver

Roughly you could just apportion the interest rate

I.e. say you have a 3% one

£200 in Jan * 3%
£150 in Fan  (11/12 of 3% is 2.75)
...
£250 in Dec x (1/12 of 3% is 0.25%)

This isn't completely accurate but it should give you the answer to the nearest £.

eskbanker

Another_Saver said:

Roughly you could just apportion the interest rate

I.e. say you have a 3% one

£200 in Jan * 3%
£150 in Fan  (11/12 of 3% is 2.75)
...
£250 in Dec x (1/12 of 3% is 0.25%)

This isn't completely accurate but it should give you the answer to the nearest £.

Yes, but to be honest, if using a simple spreadsheet for that, it's not much of a stretch from there to get to the completely accurate answer by using the actual deposit dates and the number of days on deposit for each one (subtract deposit date from end of year), instead of approximating via months!

Another_Saver

eskbanker said:

Another_Saver said:

Roughly you could just apportion the interest rate

I.e. say you have a 3% one

£200 in Jan * 3%
£150 in Fan  (11/12 of 3% is 2.75)
...
£250 in Dec x (1/12 of 3% is 0.25%)

This isn't completely accurate but it should give you the answer to the nearest £.

Yes, but to be honest, if using a simple spreadsheet for that, it's not much of a stretch from there to get to the completely accurate answer by using the actual deposit dates and the number of days on deposit for each one (subtract deposit date from end of year), instead of approximating via months!

And then you may as well go full analyst and use (1+i)^(d/365) where d is the number of days to maturity.
In any event the amount you can make from regular savers is so small I cba working this out manually.

strawb_shortcake

Thank you!
So I averaged putting £150pm away but fluctuating from £50-250 a month. 
I think, having read previous threads that I may be able to get a 13th payment in if I transfer on the 1st or 2nd of January. So I should end up with £2050 before interest 
It's only 2% interest so isn't going to be much anyway, just thought I'd try and work it out in an effort to improve my understanding and maths skills. 

eskbanker

So if you're averaging £150pm then the average balance over the year would be about £900, and therefore expected interest of roughly £18, perhaps £19.  13th payments can sometimes add pennies if you've optimised your payment dates and the provider allows and rewards them....

MaxiRobriguez

eskbanker said:

So if you're averaging £150pm then the average balance over the year would be about £900, and therefore expected interest of roughly £18, perhaps £19.  13th payments can sometimes add pennies if you've optimised your payment dates and the provider allows and rewards them....

Rather than sweating over a few pounds like this, you'd be better off spending the time working out what you can cut from your spending, alternative providers to reduce spending or how you can increase income or savings rates.

strawb_shortcake

MaxiRobriguez said:

eskbanker said:

So if you're averaging £150pm then the average balance over the year would be about £900, and therefore expected interest of roughly £18, perhaps £19.  13th payments can sometimes add pennies if you've optimised your payment dates and the provider allows and rewards them....

Rather than sweating over a few pounds like this, you'd be better off spending the time working out what you can cut from your spending, alternative providers to reduce spending or how you can increase income or savings rates.

I save a fair bit more besides, this is the first year I've done a regular saver so it was purely down to curiosity not fretting about the possibility of an extra £20 come January.
I'm not interested in cutting more from my expenditure but I am already looking at ways to make money work harder, its only been the past year or so I've been in a position to save anything like I have done.

jsmith9

The interest is calculated daily on the balance on that day

So if you have a 3% Regular Saver then the interest rate per day is 3 / 365

You then use the formula each day:

balance  = balance + balance x (3/36500)

colsten

annabanana82 said:

I save a fair bit more besides, this is the first year I've done a regular saver so it was purely down to curiosity not fretting about the possibility of an extra £20 come January.

Without going into the details of our regular savings account, with an average of £150/mth, you won't get an extra £20 on maturity. You'll be lucky to get £20 in total, even if a 13th payment were possible.