Santander Edge saving account interest

danny13579

CrickJon said:

Nath4n said:

Ayr_Rage said:

Don't forget to move the interest elsewhere, any balance over the £4000 doesn't accrue interest.

Does this mean the entire £4k+ doesn't accrue interest if the balance is over £4k, or just the portion which is over £4k doesn't accrue interest? Thanks.

£4k accrues 7% interest, but nothing above it so best to move out the interest every month. 

It's 6.78% interest. The £23.71 works out at 32 days interest, probably to make up for the day delay.

JohnSwift10

I only got £22.97 in each of my accounts. (one in wife's name) 19th March to 19th April. and 12th March to 13th April.

danny13579

JohnSwift10 said:

I only got £22.97 in each of my accounts. (one in wife's name) 19th March to 19th April. and 12th March to 13th April.

Each of these is 31 days interest at 6.78%.

CrickJon

At the end of the year - assuming you've had £4000 in the account from the first day - you should have £280 of interest. 

EDIT: THIS IS NOT CORRECT, SEE BELOW. APOLOGIES.

jameseonline

I don't know how they can advertise it as 7% if they only pay monthly etc

quicksilverfox

7.00% AER / 6.78% gross (variable) interest on balances up to £4,000
7% is what the interest would be if compounded after a year, if you have £4000 saved already there won't be any compounding so you get 6.78% 

danny13579

CrickJon said:

At the end of the year - assuming you've had £4000 in the account from the first day - you should have £280 of interest. 

This is incorrect as you're assuming that the interest compounds which at £4,000 it doesn't. 

If you open an Edge Saver and deposit the maximum £4,000 into it on day 1 and leave £4,000 in it for a year you will get £271.20 in interest.

If you open an Edge Saver and deposit any amount up to £3,738.50 on day 1, then you will end up with 7% in interest at the end as the interest will compound and after 1 year you'll end up with £261.50 interest. A total of exactly £4,000 including your interest.

If you open an Edge Saver and deposit any amount over £3,738.50 on day 1, your interest will compound until the balance reaches £4,000 and then stop compounding.

I have done up a table to help explain. It assumes you open your Edge account on 1st January 2024 and what you'll end up (per month and in total) with after exactly 1 year.

friolento

Your calculations ignore that you can skim off the monthly interest and put it into another interest-bearing account. 

CrickJon

danny13579 said:

CrickJon said:

At the end of the year - assuming you've had £4000 in the account from the first day - you should have £280 of interest. 

This is incorrect as you're assuming that the interest compounds which at £4,000 it doesn't. 

If you open an Edge Saver and deposit the maximum £4,000 into it on day 1 and leave £4,000 in it for a year you will get £271.20 in interest.

If you open an Edge Saver and deposit any amount up to £3,738.50 on day 1, then you will end up with 7% in interest at the end as the interest will compound and after 1 year you'll end up with £261.50 interest. A total of exactly £4,000 including your interest.

If you open an Edge Saver and deposit any amount over £3,738.50 on day 1, your interest will compound until the balance reaches £4,000 and then stop compounding.

I have done up a table to help explain. It assumes you open your Edge account on 1st January 2024 and what you'll end up (per month and in total) with after exactly 1 year.

Thanks. I have added a note to my comment.

FIREmenow

friolento said:

Your calculations ignore that you can skim off the monthly interest and put it into another interest-bearing account. 

I've set up an alert (SMS and email) for when the account exceeds £4k as a reminder to move interest out - thanks to someone on here who highlighted this.