How much ?

Marjrie

I’ve moved house and have about £50,000 to put into an easy access savings account. If I put this into my Santander account which is 5.2% how much interest would I get each month.
I’ve looked at all the on line calculators but can’t really understand them.
I just don’t do well with calculations and would really appreciate a figure please.
sorry for being a bit dim.

Brie

At a guess about £216 a month.  £50k x 5.2% / 12 = 216.67

Albermarle

Also be aware you may have to pay some tax on the interest.
If you are earning more than £17750, you can only earn up to £1000 pa in interest tax free.
If this is the case you may be better off putting £20K of it into an cash ISA ( tax protected)
This link explains the options quite well.
Best savings accounts: 5.1% easy access or 6.2% fixed rates (moneysavingexpert.com)

Marjrie

Albermarle said:

Also be aware you may have to pay some tax on the interest.
If you are earning more than £17750, you can only earn up to £1000 pa in interest tax free.
If this is the case you may be better off putting £20K of it into an cash ISA ( tax protected)
This link explains the options quite well.
Best savings accounts: 5.1% easy access or 6.2% fixed rates (moneysavingexpert.com)

Thank you but my only income is my state pension, so I think it should be ok? 

Is that correct? This was my reason for downsizing, this will make a big difference to me.

BooJewels

It would actually be a smidge less initially than @Brie said - as the monthly interest is actually 5.08% - so on £50k it would be £211.66 for the first full month.  If you left the interest in the account to compound (I.e. you get interest on that interest as well as the £50k) the second month it would be £212.56 etc.  After a year, it would average down to the number Brie posted - 5.2% is the annual rate.

You also won't get the exact same number each month, as you actually earn interest per day, so different amounts in 30, 31 and 28 day months.

Richard1212

Using Brie's useful calculation formula is about as good as you'll get unless you want to get bogged down in trivial details, and you've already said you are not good with arithmetic/calculations. So make a note of her formula and you'll never need to wonder again about your interest payment levels.

Always keep up to date ---say every 6 months---to make sure your Santander savings account is still up there with the leaders ( and , if not, consider moving to a higher rate if it is really worth sufficient money for you to go through the hassle of applying for a new savings account).

Bigwheels1111

You could stick 20k into a 1 year virgin isa 5.85% £1170 interest.
60 day penalty of interest to get your money early, £192.32 for the whole 20k.

Marjrie

Bigwheels1111 said:

You could stick 20k into a 1 year virgin isa 5.85% £1170 interest.
60 day penalty of interest to get your money early, £192.32 for the whole 20k.

Thank you, I’ll look at that

Bigwheels1111

Marjrie said:

Bigwheels1111 said:

You could stick 20k into a 1 year virgin isa 5.85% £1170 interest.
60 day penalty of interest to get your money early, £192.32 for the whole 20k.

Thank you, I’ll look at that

If you go with virgin, you can do what I call 
The Virgin shuffle.
You get a 14 day cooling off period.
From the day you deposit funds.
If they bring out a better rate you login, enter codes etc.
The first page that shows a monetary figure, scroll down select new savings account.
Pick the new isa with the rate you want.
Tick a few boxes, ni number etc.
Drop down box fund from old isa.
Your done.
The new rate and any interest will be in the account the next day.
I moved 3 times this year all within 25 days.
5.2 to 5.5% to 5.55%.

BooJewels

Marjrie said:

Albermarle said:

Also be aware you may have to pay some tax on the interest.
If you are earning more than £17750, you can only earn up to £1000 pa in interest tax free.
If this is the case you may be better off putting £20K of it into an cash ISA ( tax protected)
This link explains the options quite well.
Best savings accounts: 5.1% easy access or 6.2% fixed rates (moneysavingexpert.com)

Thank you but my only income is my state pension, so I think it should be ok? 

Is that correct? This was my reason for downsizing, this will make a big difference to me.

If your only income is your state pension and the interest from this £50k house equity is going to supplement it, you're not going to trouble HMRC, so tax isn't going to be payable - your total income would be something in the region of £13.2k, below your various thresholds.

If you're wanting to maximise the monthly income from your £50k, you could do slightly better by putting some of it in a fixed savings account - these lock away your money for a period of time, but the advantage to that is that you get paid a higher rate of interest.

So, for example, if you want to keep some of your cash available in easy access for emergencies, say £10k - you could put the remaining £40k into a fixed savings account - one that pays out to an external bank account monthly.  At the moment the NS&I Guaranteed Income Bond is about the best for this, as it pays 6.03% for a monthly payment - they last for 1 year.

If you had £10k in your Santander account, that would pay you £42.33 per month (i.e 1/12 of a year, it would vary a little) and you put the £40k into an NS&I Guaranteed Income Bond - currently being offered at 6.03% for monthly payments - that would pay £201 per month.  So now your monthly income has increased to £243.33 - an additional £31.67 over leaving the whole amount in Santander.

If you just need this money to generate additional income for you and don't intend spending it in the foreseeable, there are also fixed savings accounts that can offer a longer fixed term - up to 5 years, so you'd know what you're going to get for a while to come - you'd perhaps not get quite as much as the NS&I Bond quoted above, but in 2 or 3 years when interest rates are likely to have fallen, it might prove beneficial.  And the Santander rate itself is only valid for 12 months and may well change during that time too.

Albermarle

Marjrie said:

Albermarle said:

Also be aware you may have to pay some tax on the interest.
If you are earning more than £17750, you can only earn up to £1000 pa in interest tax free.
If this is the case you may be better off putting £20K of it into an cash ISA ( tax protected)
This link explains the options quite well.
Best savings accounts: 5.1% easy access or 6.2% fixed rates (moneysavingexpert.com)

Thank you but my only income is my state pension, so I think it should be ok? 

Is that correct? This was my reason for downsizing, this will make a big difference to me.

Yes you should be fine. Probably not worth looking at ISA's as you are not going to be liable for tax on interest anyway.
Unless of course you expect your income to increase at some point .