7.0% actually 3.69%?

Doctor_Who

Because it's only there for 1 month, so £21/12. The 7% figure is for a year.

ForumUser7

anakeimai said:

Thanks all, but I'm still baffled.  In one month I'll have paid in £300.00 so why at 7% doesn't that give me £21?

7% is the rate each year and interest is paid annually. Each month you get ~7%/12

Therefore, in the first month, £1.75

Albermarle

Basically if you have £3600 to save as a lump sum, you would be better just to put it a normal savings account for a one year fix. This FD account is more for people who are regular monthly savers.

anakeimai

Okay, thanks all.

jimexbox

anakeimai said:

Okay, thanks all.

The regular saver is a regular question. 

Johnjdc

anakeimai said:

Thanks all, but I'm still baffled.  In one month I'll have paid in £300.00 so why at 7% doesn't that give me £21?

It does. You will get £21 for the first £300. You just won't get £21 for all the other £300s, because you don't have them saved for a full year.

booneruk

anakeimai said:

Thanks all, but I'm still baffled.  In one month I'll have paid in £300.00 so why at 7% doesn't that give me £21?

oh if only such an account existed!

Bridlington1

One way you can look at it is by taking the average balance of the account over the whole term, then find 7% of that:

Month	Balance
1	£300.00
2	£600.00
3	£900.00
4	£1,200.00
5	£1,500.00
6	£1,800.00
7	£2,100.00
8	£2,400.00
9	£2,700.00
10	£3,000.00
11	£3,300.00
12	£3,600.00
average balance	£1,950.00
7% of average balance	£136.50

Beddie

To those who say it is not designed to deceive - it really is. If you asked 100 people in the street, half would think the same as this poster. Just because we on here are good with finances and maths does not mean everyone is.

There is a psychological draw to these high rates on regular savings, even though the actual gains are small.

ColdIron

Beddie said:

To those who say it is not designed to deceive - it really is

No it really isn't