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Are regular savings accounts worth it ?
Comments
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beefturnmail wrote: »the formula given by LXDaddy doesn't work though e.g. on M & S' Regular saver, 250 x 6.5 x 1.05 it works out as final balance of £1,706.25 and given that you put in £3,000 (250 x 12), it's obviously not right!
Splitting hairs, but dividing by 100 doesn't really add in an extra step - OK so 5% and 0.05 are the same, but I've never seen a bank quote an interest rate of 0.05 - they say 5% - so you have to divide the 5 by 100 or the calculation does't work.
No but in the literal sense 5% = 0.05
If someone knows this but not how to work out the interest and comes across "divide the interest rate by 100" they could come up with 0.0005 in theory.0 -
beefturnmail wrote: »the formula given by LXDaddy doesn't work though e.g. on M & S' Regular saver, 250 x 6.5 x 1.05 it works out as final balance of £1,706.25 and given that you put in £3,000 (250 x 12), it's obviously not right!
Splitting hairs, but dividing by 100 doesn't really add in an extra step - OK so 5% and 0.05 are the same, but I've never seen a bank quote an interest rate of 0.05 - they say 5% - so you have to divide the 5 by 100 or the calculation does't work.
You are quite right - the calculation give by me is wrong - sorry.
What I SHOULD have said is that you can work out the interest due as
monthly amount * 6.5 * interest rate
So for the M&S regular saver example £250 per month at 5%
£250 * 6.5 * 5% = £81.25 interest earned
0r
£250 * 6.5 * 0.05 = £81.25 interest earned
Apologies for the error.0 -
and we are still talking about a LOT of interest ?0
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If you only have one bank account and you open a reg.saver,
then you are not making much on the interest.
Better to open more accounts, that pay interest and manage them,
then open more reg.savers
Money into accounts and back out on the same day.
You don't need big a income to run multiple accounts.
just a descent spread sheet.0
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