Martin Lewis: How to earn 8% interest on your savings (and possibly £200 on top, too)

Former_MSE_Molly_G

It's possible to earn 8% interest on your savings – more than four times what many earn – and gain an extra £200 on top. This is all about taking advantage of special regular savings accounts.

Watch the clip here:

Martin Lewis: How to earn 8% interest on your savings (and possibly £200 on top, too)

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dealyboy

Thanks Molly, an excellent introduction to the subject.

May I suggest a follow up by way of this board's thread ... https://forums.moneysavingexpert.com/discussion/6106986/regular-savings-accounts-the-best-currently-available-list#latest a comprehensive and up to date review of what is out there, riddled with expertise.

grumbler

MSE_Molly_G said:

It's possible to earn 8% interest on your savings – more than four times what many earn – and gain an extra £200 on top. 

8%  on £200 p.m. is about £40 p.a. marketing bribe. It will take 5 years to make £200.
My point being  -   what is on top of what? [ETA: to clarify - £200 bonus on top of 8% or vice versa] 

refluxer

grumbler said:

MSE_Molly_G said:

It's possible to earn 8% interest on your savings – more than four times what many earn – and gain an extra £200 on top. 

8%  on £200 p.m. is about £40 p.a. marketing bribe. It will take 5 years to make £200.
My point being  -   what is on top of what?

The 'extra £200 on top' mentioned is the switching bonus you'll get if you also switch your current account to a building society like Nationwide, as well as opening their regular saver.

ColdIron

grumbler said:

MSE_Molly_G said:

It's possible to earn 8% interest on your savings – more than four times what many earn – and gain an extra £200 on top. 

8%  on £200 p.m. is about £40 p.a

Closer to £103 pa, why wouldn't you?

My point being  -   what is on top of what?

£200 switching bonus, it's all in the link

grumbler

ColdIron said:

grumbler said:

MSE_Molly_G said:

It's possible to earn 8% interest on your savings – more than four times what many earn – and gain an extra £200 on top. 

8%  on £200 p.m. is about £40 p.a

Closer to £103 pa, why wouldn't you?

My point being  -   what is on top of what?

£200 switching bonus, it's all in the link

£2400*6.5/12*(8%-5%)=...
5% is what many normal savings accounts are paying and on big balances.

And, IMO, "£40(bribe) on top of £200(bonus)" makes more sense than "£200 on top of £40."
ETA: and it makes much more sense to switch for corcrete £200, than for annual £40 (variable) that, iindeed, is a cherry on the top.

ColdIron

grumbler said:

ColdIron said:

grumbler said:

MSE_Molly_G said:

It's possible to earn 8% interest on your savings – more than four times what many earn – and gain an extra £200 on top. 

8%  on £200 p.m. is about £40 p.a

Closer to £103 pa, why wouldn't you?

My point being  -   what is on top of what?

£200 switching bonus, it's all in the link

£2400*6.5/12*(8%-5%)=...

So what you mean is 3%  on £200 p.m. is about £40 p.a

If you drip fed it from a 5% easy access account:

Drip-feeding the regular saver

After drip-feeding the cash for 12 months, you'd have earned...

£158 in interest
£103 from the regular saver + £55 from the normal savings account

Leaving it in normal savings

If you'd kept the cash in normal savings without drip-feeding it, you'd have earned...
£118 in interest

grumbler

What's your point? £40 is what you make extra by drip feeding (compared to just leaving money in a 5% account).
My calculation was simpler.

refluxer

grumbler said:

What's your point? £40 is what you make extra by drip feeding (compared to just leaving money in a 5% account).

These MSE articles aren't really aimed at savvy savers such as yourself - they're aimed at the general population, many of whom will have savings earning very little interest (or possible even no interest at all) and therefore won't be drip-feeding from high interest savings accounts.

ColdIron

grumbler said:

What's your point? £40 is what you make extra by drip feeding (compared to just leaving money in a 5% account).
My calculation was simpler.

Well you are comparing Nationwide's offer with a very different hypothetical construction of your own

IF you had a lump sum and IF you introduce into the construct a high paying account from a different bank then you could make more money than you would with Nationwide alone. I doubt anyone would disagree

But many do not have a lump sum available to them and £200 a month is what they can spare. If they drip fed that into this external account at 5% they would earn only £65

And that's before factoring in the possible £200 switching bonus. £303 using just Nationwide is a pretty good deal