First Direct Saver - Misunderstanding percentage return

Exodi

wiseonesomeofthetime said:

If only there was a way to get paid every time this topic arose on here 🤷‍♂️💰💰💰

I'm currently awaiting stage 2 of the thread:

"Well if the interest paid after one year is £136.50 on a balance of £3,600, then surely it should be marketed as 3.8% interest? How is 7% not false advertising?"

In the last thread about this, the OP asserted that as the interest was APR (notably: Annual Percentage Rate) and that the interest was paid at the end of the year, they expected that the interest was also calculated on the final balance at the end of the year. I don't even think that's necessarily an unreasonable assumption to make by someone not au fait with finance or Maths.

The problem is, if the interest was only calculated at the end of the year, there's nothing stopping me paying in a large lump sum on the 364th day of an easy access account and earning a years worth of interest in one day. Suffice to say, the numbers get pretty out of control fast if this was possible as I could just keep moving the money to different accounts just before their anniversary (£100 at 5% interest per day would go over 5 TRILLION within 1 year, we can only dream this would be possible!).

dealyboy

@silvercue said:

Bigwheels1111 said:

Every other week this needs to be explained to someone on here.
If you don’t understand it don’t do it.
Saying that I’ve had 10 FD regular savers in the past.
Have 5 running as of today.

I thought you could only have one?  I have 1.   How did you get 5?

I was waiting for somebody to bite 

Bigwheels1111

silvercue said:

Bigwheels1111 said:

Every other week this needs to be explained to someone on here.
If you don’t understand it don’t do it.
Saying that I’ve had 10 FD regular savers in the past.
Have 5 running as of today.

I thought you could only have one?  I have 1.   How did you get 5?

2 with FD, fund one in the wife’s name.
Skipton, Lloyds, NatWest.

BooJewels

Just because some regular posters are fully au fait with how Regular Savers work and how to work out the interest, it really isn't fair constantly berating newbies who don't yet understand it.  Either spend the time helpfully explaining it for them, or simply move along without comment. 

It couldn't possibly have been clearer from the subject line what the post was likely to be about, yet you couldn't help yourselves from reading it anyway and then spending time ensuring that you let the OP know that you think that you're smarter than them and they're a bit daft for not getting it.  If you think a question asked is beneath your superior 'savings' knowledge and you don't feel inclined to actually help them out, then just move along.

I'd already drafted an explanatory reply earlier in the thread when I saw someone else had already posted almost exactly what I was about to say (i.e. work out the monthly interest on one deposit amount and multiple by 78, as that's my own quick and dirty way of doing it, which gets very close).

dealyboy

@BooJewels "someone else" = dealyboy ... sorry about that