The Top Fixed Interest Savings Discussion Area

gordie82

Sorry didn't realise there was a difference in rate, the 5 year thing was just an example I wans't referencing anything just trying to explain the question asked about the difference between compounded interest when received monthly or annually.

Consumerist

If the AER paid monthly and yearly is the same then the only difference in total interest over the year should be down to rounding errors only. Monthly payment s are rounded when paid but the annual interest accrues daily without any rounding.

jak22

Monthly paid to the same account isnt much use on a fixed where you cant access the account until the end  - but the difference between the monthly and the AER rates is too small to need pages of posts. But if it's about the tax liability then that's actually something more complex and there's a thread just about this - it might be when you can access the interest or it might just depend on when HMRC are told of the interest.

biscan25

So yes, the difference between 4.03%and 4.11% is just compounding. For the nerds: (0.0403/12+1)^12 -1 = 4.11%
I think Atom force you to take out the interest though, so you actually get 4.03%. Presumably you'd get some interest elsewhere on the money paid out, so no drama.
My regret was solely about tax, which I think lots of people will end up paying tax on interest next year, where they perhaps never have in the past.

Still a good rate though, so I'm happy, especially since I've used Atom before so takes seconds to set up and fund a new fixed rate.

refluxer

biscan25 said:

So yes, the difference between 4.03%and 4.11% is just compounding. For the nerds: (0.0403/12+1)^12 -1 = 4.11%
I think Atom force you to take out the interest though, so you actually get 4.03%. Presumably you'd get some interest elsewhere on the money paid out, so no drama.

Just for info, you can have the interest paid into the fixed saver which makes sense, otherwise they presumably wouldn't be allowed to quote the AER figure for the monthly option.

From their fixed Saver T&Cs... "You may choose to have interest added to your account (‘paid in’) or paid into your nominated account, which is another bank or building society account in your name (‘paid out’)"

rl1

biscan25 said:

So yes, the difference between 4.03%and 4.11% is just compounding. For the nerds: (0.0403/12+1)^12 -1 = 4.11%
I think Atom force you to take out the interest though, so you actually get 4.03%. Presumably you'd get some interest elsewhere on the money paid out, so no drama.
My regret was solely about tax, which I think lots of people will end up paying tax on interest next year, where they perhaps never have in the past.

Still a good rate though, so I'm happy, especially since I've used Atom before so takes seconds to set up and fund a new fixed rate.

Thank you, that answers something I have been wondering about when the interest counts towards your tax free savings allowance.  I presume if the interest is paid monthly it is spread over 2 financial years rather than all been in one. 

alternate

looks like that Secure Trust account has a 30 day funding window.

ForumUser7

Nationwide has released some new rates
nationwide-increases-savings-rates-across-fixed-rate-and-triple-access-products

cricidmuslibale

ForumUser7 said:

Nationwide has released some new rates
nationwide-increases-savings-rates-across-fixed-rate-and-triple-access-products

Thanks very much for this, ForumUser7! As I highlighted on the Regular Savings board, the interest rates being paid by the 2 and 3 year fixed rate online bonds are actually very competitive indeed currently, indeed I believe the interest rate for the 3 year online bond is currently the best available for a 3 year fixed rate account! Well done Nationwide for once!

intalex

ForumUser7 said:

Nationwide has released some new rates
nationwide-increases-savings-rates-across-fixed-rate-and-triple-access-products

14-day deposit window from account opening
14-day cooling-off period