Club Lloyds Saver - 0.5% - monthly or yearly interest?

xxxxxxxx

(EDITED to be accurate, you don't get a choice on the Club Lloyds Regular saver which is 1.5% annual interest only- I named the wrong saver account - )

I meant Club Lloyds Saver. The useless one with only 0.2% first £25,000  then 0.5% over £25,000  - or it could be paying 0.5% on the whole balance if it is over £25,000 - I don't know because it is unclear.

I am renewing the account to pay more than just "standard saver 0.2%" which is what it currently pays. 

You can choose monthly or yearly interest, which is better, monthly or yearly interest or do they work out the same?

If it is better to have monthly why do they offer yearly?

I know the money could be doing better somewhere else, but for now I am asking this question.  

(I am also considering a Club Lloyds Regular saver at £400 per month, hence the earlier confusion.  The 1st 2 replies below came before I had edited this.).

jimexbox

Neither, use Lloyd's as your DD account and put your money with whoever pays the best rate. Which is definitely not Lloyds. 

eskbanker

xxxxxxxx said:

The same interest rates on both, it is either paid monthly or yearly.  If you choose monthly do you get interest on the interest and end up with more at the end of the year than you would have got if you had selected yearly? 

Interest will generally be paid at a gross rate, with the annual rate set higher than the monthly one to reflect that compounding effect, but in this case they're both the same 1.5%, so monthly should produce a slightly higher return, assuming the variance isn't wiped out by rounding....

AndyTh_2

eskbanker said:

xxxxxxxx said:

The same interest rates on both, it is either paid monthly or yearly.  If you choose monthly do you get interest on the interest and end up with more at the end of the year than you would have got if you had selected yearly? 

Interest will generally be paid at a gross rate, with the annual rate set higher than the monthly one to reflect that compounding effect, but in this case they're both the same 1.5%, so monthly should produce a slightly higher return, assuming the variance isn't wiped out by rounding....

Interest rates are generally quoted in AER by regulations, which would account for monthly compounding, so monthly should produce a slightly lower return (with a often unquoted or low visible displayed monthly rate, and a predominant AER rate displayed), but add up with compounding to be slightly more towards the end of the year evening out, if not withdrawing the interest

Club lloyds saver says "Earn 0.50% gross/AER"

eskbanker

AndyTh_2 said:

eskbanker said:

xxxxxxxx said:

The same interest rates on both, it is either paid monthly or yearly.  If you choose monthly do you get interest on the interest and end up with more at the end of the year than you would have got if you had selected yearly? 

Interest will generally be paid at a gross rate, with the annual rate set higher than the monthly one to reflect that compounding effect, but in this case they're both the same 1.5%, so monthly should produce a slightly higher return, assuming the variance isn't wiped out by rounding....

Interest rates are generally quoted in AER by regulations, which would account for monthly compounding, so monthly should produce a slightly lower return (with a often unquoted or low visible displayed rate), but add up with compounding to be slightly more towards the end of the year evening out, if not withdrawing the interest

Club lloyds saver says "Earn 0.50% gross/AER"

Yes, they're required to quote the AER (which is the same as gross for accounts paying interest annually), but if (as here) there is no different gross rate quoted for monthly interest, then the monthly variant should end up paying more by virtue of compounding.  If they wanted to apply a lower rate for monthly but don't quote it on the product summary box, they should expect some comeback from the FCA!

Bigwheels1111

What an I missing at 0.5%, My easy access with Al Ryan bank is 1.8%.

adindas

Bigwheels1111 said:

What an I missing at 0.5%, My easy access with Al Ryan bank is 1.8%.

You have not missed anything. One of my saving account is even paying much less than 0.5% but the balance is just around £1.

That is the way the Bank make money from people who do not watch the return they are getting and to be compared with what available in the market.

pokora

Open an account with better rates with another bank, if you are not going to get a mortgage soon.