Savings comparison

Numberwang_2

LHW99 said:y

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...)

lol LHW99, that irony was completely lost on me at the time. Been so long since picking the name, yes was from Mitchell and Webb.

Numberwang_2

friolento said:

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.

Sorry seem to have upset you, I’m glad for any help. 

I did look, it’s just the calculator seemed irrelevant as the fixed saving only allows up to 2 withdrawals per year, so can’t drip feed for the whole 12 months. 

But from your results using the calculator monthly saver at 5.25% would yeald £68 but if I left all in a fixed saver at 3.5% would yeald £83, that’s what was confusing me, that the lower % was getting more interest over the 12 months.
 I obviously wasn’t taking in to account the opportunity of the remaining reducing balance, that would yeald £39 in the said calculator.

Also as below was the thinking in my head. This is how the interest adds up to £68

month 1 £200 @ 5.25% =10.50
month 2 £200 @ 5.25% =9.63 equates to 4.815%
month 3 £200 @ 5.25% =8.75 = 4.37%
month 4 £200 @ 5.25% =7.88 = 3.94%
mth 5.                             = 7.00 = 3.5%
mth 6.                             = 6.13 = 3.06%
mth 7.                             = 5.25 = 2.65%
and so on
so I was thinking that the £200 I deposit in month 7 was only getting 2.65%, so assumed better off leaving in the 3.5%.
But thick me was not realising that both are for 6 months so the 3.5% would also be reduced as is over 6 months not 12 months.

I was just thinking in my head there was some calculation to maximise interest with a fixed sum if spread over a monthly deposit and a single deposit.

Anyways as LHW399 would remind me, ‘That’s Wangernum’ for this thread.

Eco_Miser

Numberwang_2 said:

friolento said:

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.

Sorry seem to have upset you, I’m glad for any help. 

I did look, it’s just the calculator seemed irrelevant as the fixed saving only allows up to 2 withdrawals per year, so can’t drip feed for the whole 12 months. 

But from your results using the calculator monthly saver at 5.25% would yeald £68 but if I left all in a fixed saver at 3.5% would yeald £83, that’s what was confusing me, that the lower % was getting more interest over the 12 months.
 I obviously wasn’t taking in to account the opportunity of the remaining reducing balance, that would yeald £39 in the said calculator.

Also as below was the thinking in my head. This is how the interest adds up to £68

month 1 £200 @ 5.25% =10.50
month 2 £200 @ 5.25% =9.63 equates to 4.815%
month 3 £200 @ 5.25% =8.75 = 4.37%
month 4 £200 @ 5.25% =7.88 = 3.94%
mth 5.                             = 7.00 = 3.5%
mth 6.                             = 6.13 = 3.06%
mth 7.                             = 5.25 = 2.65%
and so on
so I was thinking that the £200 I deposit in month 7 was only getting 2.65%, so assumed better off leaving in the 3.5%.
But thick me was not realising that both are for 6 months so the 3.5% would also be reduced as is over 6 months not 12 months.

I was just thinking in my head there was some calculation to maximise interest with a fixed sum if spread over a monthly deposit and a single deposit.

Anyways as LHW399 would remind me, ‘That’s Wangernum’ for this thread.

You are playing with percentages (fractions) not interest rates (fractions for a period of time - assumed to be a year if not stated) and so you are getting nonsense results. To be fair, most of the replies also quotes the percentages rather than the rates. 

clairec666

Numberwang_2 said:

Also as below was the thinking in my head. This is how the interest adds up to £68

month 1 £200 @ 5.25% =10.50
month 2 £200 @ 5.25% =9.63 equates to 4.815%
month 3 £200 @ 5.25% =8.75 = 4.37%
month 4 £200 @ 5.25% =7.88 = 3.94%
mth 5.                             = 7.00 = 3.5%
mth 6.                             = 6.13 = 3.06%
mth 7.                             = 5.25 = 2.65%
and so on
so I was thinking that the £200 I deposit in month 7 was only getting 2.65%, so assumed better off leaving in the 3.5%.
But thick me was not realising that both are for 6 months so the 3.5% would also be reduced as is over 6 months not 12 months.

I was just thinking in my head there was some calculation to maximise interest with a fixed sum if spread over a monthly deposit and a single deposit.

Sounds like you've got the hang of it now, but here's my two penn'orth...

If you put £200 per month into the 7% account, you're right, you are not getting 7% interest on the full £2400 because not all of that money has been in the account for a full year. So overall, roughly half the interest you expect.

But imagine if you were doing the same payments into the 3.5% account, i.e. £200 per month. You would also get a much lower amount of interest than 3.5% of £2400. Depositing it as a lump sum at the start of the year means that it looks like a better return than the regular saver, but just because the money has spent a full year in the account.

Best tactic? Put the lump sum in the 3.5% account, and (assuming it allows unlimited withdrawals) transfer £200 a month over to the regular saver. That way, all your money is still earning interest, either 3.5% or 7%, and by the end of the year it will all be earning 7%. If you want more exact figures, a spreadsheet does the trick.