Savings comparison

friolento

Numberwang_2 said:

friolento said:

Try this: https://www.moneysavingexpert.com/savings/regular-savings-calculator/

You need to compare apples with apples - but 5.25% is always more than 3.5%

Thanks for the reply, but £200 per month at 5.25% would earn £68 interest and £2400 at 3.5% would earn £84, after 12 months, so in this case 5.25% isn’t more than 3%. Or am I missing something? 

The figures are irrelevant I think, just trying to workout if better to save monthly at higher interest or in one lump sum at lower interest. In the above it would be better to invest in one go at the lower %. (I think)

You are definitely missing something. As it doesn't appear you used the calculator, I have done it for you.It clearly shows that you can make more than £83 (/£84) in interest. £24, nearly 30% more, actually. So please have a closer look at the linked information.

I'd also like to mention that the interest rate for the RS in your example is, and remains, 5.25%. It is not 3% at all. If it ever was 3%, you'd get substantially less than £68 interest from the RS.

Numberwang_2

Dazed_and_C0nfused said:

Numberwang_2 said:

friolento said:

Try this: https://www.moneysavingexpert.com/savings/regular-savings-calculator/

You need to compare apples with apples - but 5.25% is always more than 3.5%

Thanks for the reply, but £200 per month at 5.25% would earn £68 interest and £2400 at 3.5% would earn £84, after 12 months, so in this case 5.25% isn’t more than 3%. Or am I missing something? 

The figures are irrelevant I think, just trying to workout if better to save monthly at higher interest or in one lump sum at lower interest. In the above it would be better to invest in one go at the lower %. (I think)

You aren't doing that though.

In month one you have £200 earning 5.25% and £2,200 earnings 3.5%.

In month two it's £400 earning 5.25% and £2,000 earnings 3.5%.  And so on.

Why do you think 5.25% is less than 3.5% 🤔

The second months £200 is not earning 5.25% as it is for only 11 months that equates to 4.82%, the 4th £200 would be earning 5.25% but for only 8 months equal to 3.5% and so on, eg,the £200 after 6 months will only be earning the equivalent rate of 2.63%, so at some point, in this case there’s no point paying in after the 4th payment. As the return is less than 3.5%. 

Apologies for poor explaining or just been to dense to understand, lol

Dazed_and_C0nfused

Numberwang_2 said:

Dazed_and_C0nfused said:

Numberwang_2 said:

friolento said:

Try this: https://www.moneysavingexpert.com/savings/regular-savings-calculator/

You need to compare apples with apples - but 5.25% is always more than 3.5%

Thanks for the reply, but £200 per month at 5.25% would earn £68 interest and £2400 at 3.5% would earn £84, after 12 months, so in this case 5.25% isn’t more than 3%. Or am I missing something? 

The figures are irrelevant I think, just trying to workout if better to save monthly at higher interest or in one lump sum at lower interest. In the above it would be better to invest in one go at the lower %. (I think)

You aren't doing that though.

In month one you have £200 earning 5.25% and £2,200 earnings 3.5%.

In month two it's £400 earning 5.25% and £2,000 earnings 3.5%.  And so on.

Why do you think 5.25% is less than 3.5% 🤔

The second months £200 is not earning 5.25% as it is for only 11 months that equates to 4.82%, the 4th £200 would be earning 5.25% but for only 8 months equal to 3.5% and so on, eg,the £200 after 6 months will only be earning the equivalent rate of 2.63%, so at some point, in this case there’s no point paying in after the 4th payment. As the return is less than 3.5%. 

Apologies for poor explaining or just been to dense to understand, lol

That is where you are going wrong.  

It is earning 5.25%.

And the remainder of the money is earnings 3.5%

If you take the trouble to work it out properly you will discuss very that 5.25% is better than 3.5%

Numberwang_2

friolento said:

MNumberwang_2 said:

friolento said:

Try this: https://www.moneysavingexpert.com/savings/regular-savings-calculator/

You need to compare apples with apples - but 5.25% is always more than 3.5%

Thanks for the reply, but £200 per month at 5.25% would earn £68 interest and £2400 at 3.5% would earn £84, after 12 months, so in this case 5.25% isn’t more than 3%. Or am I missing something? 

The figures are irrelevant I think, just trying to workout if better to save monthly at higher interest or in one lump sum at lower interest. In the above it would be better to invest in one go at the lower %. (I think)

You are definitely missing something. As it doesn't appear you used the calculator, I have done it for you.It clearly shows that you can make more than £83 (/£84) in interest. £24, nearly 30% more, actually. So please have a closer look at the linked information.

I'd also like to mention that the interest rate for the RS in your example is, and remains, 5.25%. It is not 3% at all. If it ever was 3%, you'd get substantially less than £68 interest from the RS.

The final months £200 in the say 31 days would only earn 89p interest, this equates to a .45% return on this £200 not 5.25%. The 5.25% is only fully achieved on the first months deposit. The actual return on future deposits is less. In total I invest £2400 and get £68 this equates to 2.83%.

ColdIron

Numberwang_2 said:

Dazed_and_C0nfused said:

Numberwang_2 said:

friolento said:

Try this: https://www.moneysavingexpert.com/savings/regular-savings-calculator/

You need to compare apples with apples - but 5.25% is always more than 3.5%

Thanks for the reply, but £200 per month at 5.25% would earn £68 interest and £2400 at 3.5% would earn £84, after 12 months, so in this case 5.25% isn’t more than 3%. Or am I missing something? 

The figures are irrelevant I think, just trying to workout if better to save monthly at higher interest or in one lump sum at lower interest. In the above it would be better to invest in one go at the lower %. (I think)

You aren't doing that though.

In month one you have £200 earning 5.25% and £2,200 earnings 3.5%.

In month two it's £400 earning 5.25% and £2,000 earnings 3.5%.  And so on.

Why do you think 5.25% is less than 3.5% 🤔

The second months £200 is not earning 5.25% as it is for only 11 months that equates to 4.82%, the 4th £200 would be earning 5.25% but for only 8 months equal to 3.5% and so on, eg,the £200 after 6 months will only be earning the equivalent rate of 2.63%, so at some point, in this case there’s no point paying in after the 4th payment. As the return is less than 3.5%. 

Apologies for poor explaining or just been to dense to understand, lol

You are not the first and certainly won't be the last, but you have fallen into the classic trap

https://forums.moneysavingexpert.com/discussion/comment/81468250/#Comment_81468250

Dazed_and_C0nfused

Numberwang_2 said:

friolento said:

MNumberwang_2 said:

friolento said:

Try this: https://www.moneysavingexpert.com/savings/regular-savings-calculator/

You need to compare apples with apples - but 5.25% is always more than 3.5%

Thanks for the reply, but £200 per month at 5.25% would earn £68 interest and £2400 at 3.5% would earn £84, after 12 months, so in this case 5.25% isn’t more than 3%. Or am I missing something? 

The figures are irrelevant I think, just trying to workout if better to save monthly at higher interest or in one lump sum at lower interest. In the above it would be better to invest in one go at the lower %. (I think)

You are definitely missing something. As it doesn't appear you used the calculator, I have done it for you.It clearly shows that you can make more than £83 (/£84) in interest. £24, nearly 30% more, actually. So please have a closer look at the linked information.

I'd also like to mention that the interest rate for the RS in your example is, and remains, 5.25%. It is not 3% at all. If it ever was 3%, you'd get substantially less than £68 interest from the RS.

The final months £200 in the say 31 days would only earn 89p interest, this equates to a .45% return on this £200 not 5.25%. The 5.25% is only fully achieved on the first months deposit. The actual return on future deposits is less. In total I invest £2400 and get £68 this equates to 2.83%.

In the final month you have £2,400 earning 5.25%.

And nothing earning 3.5%.

Trust me there have been a great many people posting similar things and they all get it eventually.

Doing the maths in full will definitely help you to grasp this.

Middle_of_the_Road

Here is another way to help understand accounts with non-constant balances 

This was posted recently by @slinger2

Of course the same's true with any savings account. If I have £1200 in a 6% account and take out £100 per month, I'm not going to get £72 interest over the year, only half that (roughly).

And it also applies to Mortgages. If I take out a £100,000 mortgage at 6% over 25 years, I'll be paying nearly £6,000 interest in the first year but, as I pay off the capital, I'll owe very little in the 25th year and so pay very little interest too.

friolento

Numberwang_2 said:

friolento said:

MNumberwang_2 said:

friolento said:

Try this: https://www.moneysavingexpert.com/savings/regular-savings-calculator/

You need to compare apples with apples - but 5.25% is always more than 3.5%

Thanks for the reply, but £200 per month at 5.25% would earn £68 interest and £2400 at 3.5% would earn £84, after 12 months, so in this case 5.25% isn’t more than 3%. Or am I missing something? 

The figures are irrelevant I think, just trying to workout if better to save monthly at higher interest or in one lump sum at lower interest. In the above it would be better to invest in one go at the lower %. (I think)

You are definitely missing something. As it doesn't appear you used the calculator, I have done it for you.It clearly shows that you can make more than £83 (/£84) in interest. £24, nearly 30% more, actually. So please have a closer look at the linked information.

I'd also like to mention that the interest rate for the RS in your example is, and remains, 5.25%. It is not 3% at all. If it ever was 3%, you'd get substantially less than £68 interest from the RS.

The final months £200 in the say 31 days would only earn 89p interest, this equates to a .45% return on this £200 not 5.25%. The 5.25% is only fully achieved on the first months deposit. The actual return on future deposits is less. In total I invest £2400 and get £68 this equates to 2.83%.

As you are apparently not willing to look at the link and the calculations I posted, or to what others have posted, I give up.Just in parting, I have to add that you have got this totally wrong. You are also talking savings, not investments. There is a substantial difference between these two.

eskbanker

OP is obviously inspired by the fictional game after which they're seemingly named:

Numberwang: A "maths quiz" game show in which two contestants, Simon and Julie (Paterson Joseph and Olivia Colman), call out numbers until the host (Webb) declares "That's Numberwang." The rules of the game are left completely unexplained to the viewer, and appear to follow no logic whatsoever, to the point that sometimes the gameplay even seems to contradict itself. What Numberwang actually means is never revealed.

https://en.wikipedia.org/wiki/That_Mitchell_and_Webb_Look

LHW99

eskbanker said:

OP is obviously inspired by the fictional game after which they're seemingly named:

Numberwang: A "maths quiz" game show in which two contestants, Simon and Julie (Paterson Joseph and Olivia Colman), call out numbers until the host (Webb) declares "That's Numberwang." The rules of the game are left completely unexplained to the viewer, and appear to follow no logic whatsoever, to the point that sometimes the gameplay even seems to contradict itself. What Numberwang actually means is never revealed.

https://en.wikipedia.org/wiki/That_Mitchell_and_Webb_Look

Mornington Crescent!

(I'm Sorry I haven't a Clue...)