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AER is a made-up number with strict rules, that assume all interest compounds. - which the edge saver would do, if you didn't have so much in it.
Eco Miser
Saving money for well over half a century0 -
Same thing (sort of) with AER on 6 month savings accounts - how can you quote an ANNUAL rate for a product that is only running for half that term?
Answer's in the EQUIVALENT bit of AER.
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Makes sense. So for all those 4k ers out there the interest rate is really 5.84 not 6
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There's a maths problem. What's the maximum you could put in so for the whole year your interest is truly 6%
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..or have a second Edge Saver to which you transfer the monthly interest from the first £4k Edge Saver, then I think the combined interest rate is 6%….until that one's full too.
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How do you get a second Edge Saver please?
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If someone has that then why not move some funds from one to the other so that you do not have to skim the interest each month?
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Well since you're being serious, because both Edge savers are already full (earning 6% APR).
Open a second Edge current account (there may be cashback available). Do not set up DDs on this second account and it won't attract the monthly fee.
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4000 / 1.06 = £3,773.58. Or perhaps slightly more - that gets you to £4,000 after 12 months, and I suppose that if you're at or under £4,000 after 11 months, you'll still get the full interest on the anniversary, but not after that.
The monthly factor by which your savings are multiplied by is (1 + .0584/12) = 1.004867. £3,791.99 would end up as £4,000.00 after 11 months.
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You said "have a second Edge Saver to which you transfer the monthly interest from the first £4k Edge Saver"
If the second Edge saver is already full you wouldn't do that. If the second Edge saver isn't full, you would split the funds between the two in order to avoid having to transfer the interest.
I acknowledge I am being pedantic.
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