Interesting - Nationwide Flex Regular Saver 8% AER

AmityNeon

Exodi said:

Using FV in Excel =FV(0.08/12,12,-200,0,1) gives £106.59 interest, but you can expect that they've factored in the things like payments clearing.

That's a slight overestimation as it compounds every month (~8.30% AER), which is not what happens in practice. The FV function isn't suited to balance changes without concomitant interest in the same period.

[Deleted User]

zagfles said:

[Deleted User] said:

BoGoF said:

[Deleted User] said:

BoGoF said:

[Deleted User] said:

BoGoF said:

What do you think it should be?

Give Nationwide a call

No need when the website says (estimate) £104.

Yes it does   However if websites Occam Investing, Nutmeg and the Calculator site are anything to go by the interest should be £323.19.

AI Captain...

Suggest you read the responses since and see why you are wrong and not comparing like for like

Yes of course   The others present no math to support either Nationwide or themselves. So what math is Nationwide using to arrive at the princely undersum of £104. What should smart savers do, believe everthing they read?

The general approx formula for regular savers is monthly deposit * 6.5 * rate/100. Because the average balance over the year is 6.5 times the monthly deposit. That assume 12 deposits on the same date each month. It's approximate because of different month lengths, but will be fairly close.

But Nationwide are different in that they use calendar months for the deposit limit. That means you can open it today and pay in £200, then pay another £200 in tomorrow (because it's a new month) and on the 1st of every month till 1st Jan next year. Total of 13 payments, and you'd get about £120 interest.

In fact today is the best possible day to open this account! Because Feb is the shortest month so you get more in earlier.

The product description says the interest is compounded daily so does it matter

[Deleted User]

BoGoF said:

[Deleted User] said:

BoGoF said:

[Deleted User] said:

BoGoF said:

[Deleted User] said:

BoGoF said:

What do you think it should be?

Give Nationwide a call

No need when the website says (estimate) £104.

Yes it does   However if websites Occam Investing, Nutmeg and the Calculator site are anything to go by the interest should be £323.19.

AI Captain...

Suggest you read the responses since and see why you are wrong and not comparing like for like

Yes of course   The others present no math to support either Nationwide or themselves. So what math is Nationwide using to arrive at the princely undersum of £104. What should smart savers do, believe everthing they read?

Well you are clearly not reading the responses as explanations have been given. 

Evidence of what has been said, where is it?

Rich1976

Not sure how many times people need to explain how regular savers work on these threads 🙄 and still it doesn’t sink in.

AmityNeon

Rich1976 said:

Not sure how many times people need to explain how regular savers work on these threads 🙄 and still it doesn’t sink in.

It's not that. Check the OP's extensive (trolling) history.

Rich1976

AmityNeon said:

Rich1976 said:

Not sure how many times people need to explain how regular savers work on these threads 🙄 and still it doesn’t sink in.

It's not that. Check the OP's extensive (trolling) history.

Ah ok, that’s even worse then a genuine lack of understanding!

[Deleted User]

AmityNeon said:

Exodi said:

Using FV in Excel =FV(0.08/12,12,-200,0,1) gives £106.59 interest, but you can expect that they've factored in the things like payments clearing.

That's a slight overestimation as it compounds every month (~8.30% AER), which is not what happens in practice. The FV function isn't suited to balance changes without concomitant interest in the same period.

Yes, I had already looked at the FV function. Its a blackbox and Microsoft do not tell us whats inside. Look at this from a simple interest point of view. You put £2400+£104 into a savings account at 104/2504 or 4.15% without compounding. The interest earned would be £2504 x 0.0415 approx equals £104. But Nationwide is advertising an AER of 8%. So whats going on.

happybagger

I love it when some still seem to think that they should receive interest on money they haven't invested.

Throughout my life with regular saver accounts I have always looked at seven twelfths x balance x rate as the figure to calculate, yes there are lots of variations such as what time of the month etc but that'll do for my purposes.

Stargunner

[Deleted User] said:

AmityNeon said:

Exodi said:

Using FV in Excel =FV(0.08/12,12,-200,0,1) gives £106.59 interest, but you can expect that they've factored in the things like payments clearing.

That's a slight overestimation as it compounds every month (~8.30% AER), which is not what happens in practice. The FV function isn't suited to balance changes without concomitant interest in the same period.

Yes, I had already looked at the FV function. Its a blackbox and Microsoft do not tell us whats inside. Look at this from a simple interest point of view. You put £2400+£104 into a savings account at 104/2504 or 4.15% without compounding. The interest earned would be £2504 x 0.0415 approx equals £104. But Nationwide is advertising an AER of 8%. So whats going on.

The AER is 8%. If you read the previous replies, they explain what is going on.

Rich1976

[Deleted User] said:

Rich1976 said:

AmityNeon said:

Rich1976 said:

Not sure how many times people need to explain how regular savers work on these threads 🙄 and still it doesn’t sink in.

It's not that. Check the OP's extensive (trolling) history.

Ah ok, that’s even worse then a genuine lack of understanding!

Provide the math behind your rhetoric or are you math illiterate?

I understand how regular savers work thanks.

and it is maths not math. Didn’t realise I was on an American forum