The Top Fixed Interest Savings Discussion Area

RG2015

gordie82 said:

rl1 said:

biscan25 said:

averageguy11 said:

Atom Bank 4.11% option for interest monthly or upon maturity 

I went for this. Went for annual interest by accident That will cost me a bit.

Could you please explain why it will cost you. I have never understood the difference. 

Missing out of the compounded interest earned during those months.

But going for monthly interest would lose you the compounded interest.

The poster said it would cost them by going for annual interest by mistake.

I wonder if they meant it would load the wrong tax year thus pushing them over their tax limit.

refluxer

RG2015 said:

gordie82 said:

Missing out of the compounded interest earned during those months.

But going for monthly interest would lose you the compounded interest.

Not if the monthly interest is paid into the same account though ?

gordie82

You make more intrest by reciving the interest monthly not annual so the poster is correct.

The difference won't be much, for example £50k @ 4.11% over 5 years

Interest recieved annually =£61,155.04
Interest recieved monthly = £61,385.39

Difference £230.35 over 5 years

RG2015

refluxer said:

RG2015 said:

gordie82 said:

Missing out of the compounded interest earned during those months.

But going for monthly interest would lose you the compounded interest.

Not if the monthly interest is paid into the same account though ?

Yes, my mistake. I assumed that the interest would be paid out to an external nominated account.

I guess that if tax was an issue then monthly interest paid to the same account would be the better option with no loss of interest.

refluxer

gordie82 said:

You make more intrest by reciving the interest monthly not annual so the poster is correct.

The difference won't be much, for example £50k @ 4.11% over 5 years

Interest recieved annually =£61,155.04
Interest recieved monthly = £61,385.39

Difference £230.35 over 5 years

That's not right - when the AER figure is the same for both monthly and annual interest (as it is for the Atom Fixed Rate Savers), then the interest received is going to be more or less the same no matter which option you choose, provided you have the interest paid into the account.

RG2015

gordie82 said:

You make more intrest by reciving the interest monthly not annual so the poster is correct.

The difference won't be much, for example £50k @ 4.11% over 5 years

Interest recieved annually =£61,155.04
Interest recieved monthly = £61,385.39

Difference £230.35 over 5 years

Sorry, but this makes no sense and in any case it is not a 5 year account, but a 1 year account.

biscan25

Basically interest rates were low this year, so I want to push as much interest into this tax year as I can as I'll just fall short of the savings interest limit of £500.
In hindsight this mistake won't cost me barely anything as projected interest on other savings this year is £480.

strangerer

refluxer said:

gordie82 said:

You make more intrest by reciving the interest monthly not annual so the poster is correct.

The difference won't be much, for example £50k @ 4.11% over 5 years

Interest recieved annually =£61,155.04
Interest recieved monthly = £61,385.39

Difference £230.35 over 5 years

That's not right - when the AER figure is the same for both monthly and annual interest (as it is for the Atom Fixed Rate Savers), then the interest received is going to be more or less the same no matter which option you choose, provided you have the interest paid into the account.

I don't think the rate is the same anyway on this account. 4.03 on the monthly interest.

refluxer

strangerer said:

refluxer said:

gordie82 said:

You make more intrest by reciving the interest monthly not annual so the poster is correct.

The difference won't be much, for example £50k @ 4.11% over 5 years

Interest recieved annually =£61,155.04
Interest recieved monthly = £61,385.39

Difference £230.35 over 5 years

That's not right - when the AER figure is the same for both monthly and annual interest (as it is for the Atom Fixed Rate Savers), then the interest received is going to be more or less the same no matter which option you choose, provided you have the interest paid into the account.

I don't think the rate is the same anyway on this account. 4.03 on the monthly interest.

You get the gross rate of 4.03% each month if you have the monthly interest paid away but if you have that monthly interest paid into the same account, you'll achieve a rate of 4.11% over the year (AER)

RG2015

strangerer said:

refluxer said:

gordie82 said:

You make more intrest by reciving the interest monthly not annual so the poster is correct.

The difference won't be much, for example £50k @ 4.11% over 5 years

Interest recieved annually =£61,155.04
Interest recieved monthly = £61,385.39

Difference £230.35 over 5 years

That's not right - when the AER figure is the same for both monthly and annual interest (as it is for the Atom Fixed Rate Savers), then the interest received is going to be more or less the same no matter which option you choose, provided you have the interest paid into the account.

I don't think the rate is the same anyway on this account. 4.03 on the monthly interest.

Yes, but every month the balance on the fixed saver is increased by the monthly interest and this compounds every month thus giving an overall yield of 4.11% on the original deposit.