Moneybox ISA annual interest

clairec666

eskbanker said:

clairec666 said:

Somewhat bends the rules of what "AER" means.

"AER (Annual Equivalent Rate)​​ Illustrates what the interest rate would be if interest was paid and compounded each year."

Yet this rate isn't applicable over the whole year!

AER isn't only used for rates that are in place for at least a year - it's an standardised calculation that's evidently more suited to long-running rates but its annualisation is technically appropriate for shorter periods too.

I know that. But for someone less mathematically-minded, they might assume that's what they'll get over a whole year.

slinger2

Of course even the 5.05% isn't applicable over the whole year either. That's because the interest rate is actually "5.05% AER (variable)". 5.05% is the day 1 rate.

stevec59

I’m just looking at Cash ISA, Money box is currently doing 5.71% for 3 months and then 4.2% for the last 9, so how much would that work out on £10k? I’m comparing it with Trading 212, that pays 4.83%, so if both rates didn’t change, which one would pay the most? Shame Moneybox doesn’t have a calculator on there site, unless it’s hiding somewhere 😀

eskbanker

stevec59 said:

I’m just looking at Cash ISA, Money box is currently doing 5.71% for 3 months and then 4.2% for the last 9, so how much would that work out on £10k? I’m comparing it with Trading 212, that pays 4.83%, so if both rates didn’t change, which one would pay the most? Shame Moneybox doesn’t have a calculator on there site, unless it’s hiding somewhere 😀

It's at the foot of the page:

What would the estimated balance be after 12 and 24 months based on a £1,000 deposit

Estimated balance after 12 months (higher interest rate of 5.71% including 1.51% bonus interest rate for 3 months) and then higher interest rate of 4.20% applying for the subsequent 9 months: £1045.74

https://www.moneyboxapp.com/cash-isa

so an effective annual rate of 4.57%.

slinger2

stevec59 said:

I’m just looking at Cash ISA, Money box is currently doing 5.71% for 3 months and then 4.2% for the last 9, so how much would that work out on £10k? I’m comparing it with Trading 212, that pays 4.83%, so if both rates didn’t change, which one would pay the most? Shame Moneybox doesn’t have a calculator on there site, unless it’s hiding somewhere 😀

The bonus for 3 months is an annual rate of 1.51%, so that's 0.38% over 3 months, giving an annual rate of roughly 4.58%.

stevec59

Thanks. Just found out that Trading 212 4.83% is for new customers only, I already have a cash ISA with them, so it’s 4.35, so it looks like Moneybox wins. I’m thinking about putting £10k in and another £10k in a fixed interest account, not sure if that will be 1 yr or 2, I’ll see when my other accounts mature. If I invest £20k in total this year, can I transfer last years Trading 212 Cash ISA (about £5k) into one of the 2 new Cash ISA’s as well?

slinger2

Yes, you can transfer the Trading212 Cash ISA into one of those, as long as the T&Cs of the new ISA allows it. Most fixed rate accounts only have a shortish window after opening in which deposits are allowed.

Look like the basic Trading212 Cash ISA rate will be 4.10% pretty soon. Of course, this and the Moneybox ISAs are variable rate products, so rates could be anything.

eskbanker

stevec59 said:

Thanks. Just found out that Trading 212 4.83% is for new customers only, I already have a cash ISA with them, so it’s 4.35, so it looks like Moneybox wins. I’m thinking about putting £10k in and another £10k in a fixed interest account, not sure if that will be 1 yr or 2, I’ll see when my other accounts mature. If I invest £20k in total this year, can I transfer last years Trading 212 Cash ISA (about £5k) into one of the 2 new Cash ISA’s as well?

Yes, transfers don't affect, and aren't affected by, your annual contribution allowance, as long as they're executed via the receiving provider's ISA transfer process.