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Chip 3% App

edited 11 July 2018 at 11:55AM in Savings & Investments
50 replies 7.3K views
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  • karlie88karlie88 Forumite
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    Have to say that I do enjoy aj23's threads - they make me :rotfl:

    Particularly how he tries to educate other MSE users when it comes to earning interest on various savings accounts. :rotfl: :rotfl:

    Oh the irony!

    Re: Chip 3% app. Concentrate on filling up your Tesco Bank current account rather than trying to decipher the intricate nature of Chip's 3% app. :rotfl:
    :grouphug: :D Official MSE canny forumite and HUKD VIP badge member :D :grouphug:
  • edited 12 July 2018 at 11:57AM
    aj23_2aj23_2 Forumite
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    edited 12 July 2018 at 11:57AM
    karlie88 wrote: »
    Have to say that I do enjoy aj23's threads - they make me :rotfl:

    Particularly how he tries to educate other MSE users when it comes to earning interest on various savings accounts. :rotfl: :rotfl:

    Oh the irony!

    Re: Chip 3% app. Concentrate on filling up your Tesco Bank current account rather than trying to decipher the intricate nature of Chip's 3% app. :rotfl:

    It flatters me that I'm in your thoughts enough to check if I post to be honest! I believe my OP was asking for clarity, not to educate. Maybe all of the :rotfl: have made you light headed.

    But thanks for your humorous yet pointless contribution which hasn't added anything at all. I'm sure we are all grateful. Though it is a bit creepy that you remember by personal banking. Again, surprised you think about me that much...
  • ValiantSonValiantSon
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    Aj23 wrote: »
    Nope, not for a Regular Saver.

    "Mr Matt Mattics and his £3,000 savings

    Matt has saved a total of £3,000 in a regular savings account paying 10% interest over a year.

    What Matt expects to earn? His simple sum works out that he's put £3,000 in at 10% therefore he should earn £300 in interest.

    Why is this wrong? Matt only had £3,000 in there for the last month; it took a year to build up to that amount. You only earn interest on money in the account. So after the first month he was earning the 10% on just £250, half way through the year he was earning it on £1,500.

    How Matt should work it out? Over the year, his average balance was roughly half the £3,000, in other words £1,500... so Matt should expect to earn around 10% of £1,500 over the year, which is £150."

    Yet another instance of you not understanding interest. The MSE guide that you quoted contains a very important qualification, which you have ignored: the word, "roughly". What I have said is absolutely correct.

    The MSE guide is intended to show, in simple terms, what is going on, but in reducing it to simple terms, it also becomes a little misleading. Interest is not paid on the average balance!
  • edited 12 July 2018 at 12:00PM
    aj23_2aj23_2 Forumite
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    edited 12 July 2018 at 12:00PM
    ValiantSon wrote: »
    Yet another instance of you not understanding interest. The MSE guide that you quoted contains a very important qualification, which you have ignored: the word, "roughly". What I have said is absolutely correct.

    The MSE guide is intended to show, in simple terms, what is going on, but in reducing it to simple terms, it also becomes a little misleading. Interest is not paid on the average balance!

    You: "Regular savers don't pay interest on the average balance."

    MSE: "How Matt should work it out? Over the year, his average balance was roughly half the £3,000, in other words £1,500... so Matt should expect to earn around 10% of £1,500 over the year, which is £150."

    This is far from you being 'absolutely correct' LOL

    Spin it how you like, you're still wrong. The use of 'roughly' is superfluous to your argument because it's obvious according to when in the month you deposit if it varies. Either way, interest is paid on the average balance of the term, not the max balance. Just accept it. You two are always gunning for an argument.
  • youngretiredyoungretired Forumite
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    The total amount that you can manually save a year is £7200 but if you use the auto-saves then this can be higher re MSE & Chips FAQs

    How does it work? It analyses your income and spending, then every four to seven days calculates what you can afford to save, and uses a direct debit to move that to a separate 'savings' account. The money normally amounts to about £10-£25 five times monthly; the max is £100 (so £500/mth).

    You can also manually move a max £100/day up to six times a month, tell it to save more or less and pause automatic saving.
  • Paul_DNAPPaul_DNAP Forumite
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    Aj23 wrote: »
    You: "Regular savers don't pay interest on the average balance."

    MSE: "How Matt should work it out? Over the year, his average balance was roughly half the £3,000, in other words £1,500... so Matt should expect to earn around 10% of £1,500 over the year, which is £150."

    This is far from you being 'absolutely correct' LOL

    Spin it how you like, you're still wrong. The use of 'roughly' is superfluous to your argument because it's obvious according to when in the month you deposit if it varies. Either way, interest is paid on the average balance of the term, not the max balance. Just accept it. You two are always gunning for an argument.


    No, he's correct. The "average balance" thing in the regular saver guide on this website is a rough guide to explain why the interest payment isn't 3% of the final balance due to the balance being built up in instalments through the time, as that is a question MSE Martin is often asked.


    It is not, however, describing how the bank will calculate the interest payment for the account, that is done on a daily basis based on the balance at the end of the day (some do it weekly) and then that is added up and credited to the account at the advertised interval (monthly, quarterly, yearly etc.) where it then becomes part of the total balance and can begin to compound. (The daily rate will be adjusted downwards to allow for the compounding effect to take it to 3% APR).


    So the interest calculation is a lot more complex than your "take 3% of the average balance" as it depends on the date of account opening, the interest credit interval, and the exact timing of any deposit and withdrawal from the account.


    BUT as a rough guide to your expected first year return, you could use that approach, if the deposits are regular and the interest is annual.
    (Although I could be wrong, I often am.)
  • edited 12 July 2018 at 3:05PM
    ValiantSonValiantSon
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    edited 12 July 2018 at 3:05PM
    Aj23 wrote: »
    You: "Regular savers don't pay interest on the average balance."

    MSE: "How Matt should work it out? Over the year, his average balance was roughly half the £3,000, in other words £1,500... so Matt should expect to earn around 10% of £1,500 over the year, which is £150."

    This is far from you being 'absolutely correct' LOL

    Spin it how you like, you're still wrong. The use of 'roughly' is superfluous to your argument because it's obvious according to when in the month you deposit if it varies. Either way, interest is paid on the average balance of the term, not the max balance. Just accept it. You two are always gunning for an argument.
    :wall:

    There really is no point with you, is there?

    When numerous people repeatedly correct you about interest calculation, it is worth asking yourself whether all of these experienced people are wrong and you alone are right, or whether the reverse may be true.

    No, I am not wrong. I give up, however, because you never ever listen.
  • edited 12 July 2018 at 3:12PM
    aj23_2aj23_2 Forumite
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    edited 12 July 2018 at 3:12PM
    ValiantSon wrote: »
    :wall:

    There really is no point with you, is there?

    When numerous people repeatedly correct you about interest calculation, it is worth asking yourself whether all of these experienced people are wrong and you alone are right, or whether the reverse may be true.

    No, I am not wrong. I give up, however, because you never ever listen.

    You're the one who commented. I didn't ask you to. in fact, I've asked you multiple times not to. You follow me about. You are always looking for a reason to argue, you just can't help yourself. This thread was constructive and helpful until you and Karlie got involved with your unwanted and unhelpful comments. You expect me to listen to you, but not you to me. You can't have it all your way. Others have contradicted you in this thread. I even quoted you against MSE and you still won't accept it or acknowledge a discrepancy in your evaluation and fall back on the use of 'roughly' as a get out clause.
  • edited 12 July 2018 at 3:13PM
    aj23_2aj23_2 Forumite
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    edited 12 July 2018 at 3:13PM
    Paul_DNAP wrote: »
    No, he's correct. The "average balance" thing in the regular saver guide on this website is a rough guide to explain why the interest payment isn't 3% of the final balance due to the balance being built up in instalments through the time, as that is a question MSE Martin is often asked.


    It is not, however, describing how the bank will calculate the interest payment for the account, that is done on a daily basis based on the balance at the end of the day (some do it weekly) and then that is added up and credited to the account at the advertised interval (monthly, quarterly, yearly etc.) where it then becomes part of the total balance and can begin to compound. (The daily rate will be adjusted downwards to allow for the compounding effect to take it to 3% APR).


    So the interest calculation is a lot more complex than your "take 3% of the average balance" as it depends on the date of account opening, the interest credit interval, and the exact timing of any deposit and withdrawal from the account.


    BUT as a rough guide to your expected first year return, you could use that approach, if the deposits are regular and the interest is annual.

    It still works in a similar principle to how a regular saver works though, as you conclude. Someone earlier said to use the regular saver calculator to work out the interest. So I'm not wrong like ValiantSon is saying. But thanks for you helpful comments.
  • edited 12 July 2018 at 3:33PM
    ValiantSonValiantSon
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    edited 12 July 2018 at 3:33PM
    Aj23 wrote: »
    You're the one who commented. I didn't ask you to. in fact, I've asked you multiple times not to.

    You don't decide who does and doesn't post.
    Aj23 wrote: »
    You follow me about.

    Don't flatter yourself. This is an internet forum where lots of people post. I happen to post in some of the same threads as you.
    Aj23 wrote: »
    You are always looking for a reason to argue, you just can't help yourself.

    Whatever. You wrote something that was wrong and I posted a correction. It is you who then tried to argue about it, even though you are wrong, and have been shown to be on repeated occasions. My post was not only intended to (once again) try to explain to you how interest is calculated, but also to avoid others being mislead by your error.
    Aj23 wrote: »
    This thread was constructive and helpful until you and Karlie got involved with your unwanted and unhelpful comments.

    What I wrote was completely helpful and constructive, as it was explaining how interest is actually calculated.
    Aj23 wrote: »
    You expect me to listen to you, but not you to me. You can't have it all your way.

    I will gladly listen if you post something that is factually correct, but on this mater you aren't.
    Aj23 wrote: »
    Others have contradicted you in this thread.

    Where?

    Nobody in this thread has disagreed with what I wrote, other than you.
    Aj23 wrote: »
    I even quoted you against MSE and you still won't accept it or acknowledge a discrepancy in your evaluation and fall back on the use of 'roughly' as a get out clause.

    Please identify this apparent discrepancy.

    No, you don't seem to understand what the word, "roughly" means. It is a synonym for "approximately", so it means that the "average balance" is only an approximation of how it is calculated. I have explained how it is actually calculated. I'm not falling back on anything; not only do I understand how to calculate interest rates, I also understand the English language.
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