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Monthly or annual interest??
vixen1500
Posts: 655 Forumite
Monthly interest 4.41% added to account
Or
Annual interest 4.5%
Is there any difference in the total amount of interest you receive?
Or
Annual interest 4.5%
Is there any difference in the total amount of interest you receive?
Typically confused and asking for advice
0
Comments
-
As 4.41% gross monthly = 4.50% AER, they should essentially pay out the same amount* provided the monthly interest is left in the account and allowed to compound.
*there may be a very small difference of a few pence to a pound or so, depending on the amount saved1 -
The key thing is whether the AER is the same for the monthly and annual options.(1+0.0441/12)^12-1 = 4.50%So it is likely that you are comparing 4.41% gross monthly with 4.5% gross annual. And as both have the same AER of 4.5%pa there is essentially no difference (ignoring minor differences).I came, I saw, I melted1
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