Are regular savings accounts worth it ?

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  • Jibeddy
    Jibeddy Posts: 86 Forumite
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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.
  • LXdaddy
    LXdaddy Posts: 693 Forumite
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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.

    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.
  • No_6
    No_6 Posts: 835 Forumite
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    and we are still talking about a LOT of interest ?
  • beefturnmail
    beefturnmail Posts: 906 Forumite
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    No_6 wrote: »
    and we are still talking about a LOT of interest ?

    Well how much is "a LOT"? To some people £1 is " a LOT"
  • No_6
    No_6 Posts: 835 Forumite
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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.
  • RG2015
    RG2015 Posts: 5,904 Forumite
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    No_6 wrote: »
    You don't need big a income to run multiple accounts.
    just a descent spread sheet.
    My spreadsheets are always falling down too. :)
  • EachPenny
    EachPenny Posts: 12,239 Forumite
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    RG2015 wrote: »
    My spreadsheets are always falling down too. :)

    I think No_6's spreadsheet is for tracking interest rate changes over time. ;)
    "In the future, everyone will be rich for 15 minutes"
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