Interest calculations

Monthly Savings Accounts

Many banks and building societies offer monthly savings accounts with high interest rates. However, the actual interest rec
account is terminated after one year, meaning that each months contribution is invested for progressively less time.

As an example, take an account advertised as paying 10% gross AER -

Monthly contribution amount £100.00

Annual interest gross AER 10.00%

Contribution Contribution Capital Monthly Accumulated

Date Amount Balance Interest Interest

Account opened 01/01/09 £100.00 £100.00

01/02/09 £100.00 £200.00 £0.83 £0.83
01/03/09 £100.00 £300.00 £1.67 £2.50
01/04/09 £100.00 £400.00 £2.50 £5.00
01/05/09 £100.00 £500.00 £3.33 £8.33
01/06/09 £100.00 £600.00 £4.17 £12.50
01/07/09 £100.00 £700.00 £5.00 £17.50
01/08/09 £100.00 £800.00 £5.83 £23.33
01/09/09 £100.00 £900.00 £6.67 £30.00
01/10/09 £100.00 £1,000.00 £7.50 £37.50
01/11/09 £100.00 £1,100.00 £8.33 £45.83
01/12/09 £100.00 £1,200.00 £9.17 £55.00
Account closed 01/01/10 £1,200.00 £10.00 £65.00

Final balance £1,200.00

Total interest £65.00
Interest received as a % of final balance 5.4%
Average balance £650.00
Interest received as a % of average balance 10.0%

Page 1
 Interest calculations

avings Accounts

es. However, the actual interest received will amount to a little over half of that advertised due to the fact that the
d for progressively less time.

Page 2
 Interest calculations

fact that the

Page 3
new 10 per
cent Regular
Halifax
Saver account,
Launche
unlike other
accounts
s 10%
available in the
market this is Product example
Regular
not linked to a
Saver
current
Thursday
account.
The new
Savers
5th
accountJunewill
is
Open
benefit tofrom
new
available
2008 for a
and
best existing
buy rate
limited six
customers,
and a period,
leading one
week
account
maximum per
from Monday
adult.
If the
monthly Account
account
9th June until
available
is closed
deposit
Each for
theaof
early
limit
year
Sunday 20th
limited
or a and
capital period
July.
ending
withdrawal
interest 20th
are is
10%
July
made, gross
2008.
the One
rate
swept
Key into
features:
interest, one
fixed
regular
Deposit
of saver
interest
six will
for a year
account
between
revert per
£25
tosome
the
nominated
Unlike
customer,
and £500Web
Halifax
accounts. per
each
The
other
year.
month banks,
by
Saver
regular
customerswithout
saverare
standing
card
accountrate order
forto
not obliged
the period
remains
take a low of
open
investment.
and deposits
interest current
can continue
Operated
account invia to
be made
branch or
order to open
online
the regular
saver
Regular account.
Savings
Accounts
Company Account Gross Rate Min deposit

Halifax Regular Saver 10.00% £25.00

Barclays Bank Monthly 7.49% £20.00

Savings
Abbey Fixed Monthly 7.25% £20.00
"This
Savers whois the Saver 7
market
maintain anleading
Principality BS Regular Saver 7.00% £20.00
regular savings
additionalshow Bond 5
Statistics
account.
Skipton Ittheir
BS is
£5000
that in inthe UK Special Saver 6.80% £10.00
now even
Yorkshire
of all BS Regular Saver
nominated
25%
Source: 6.35% £10.00
more
Halifax attractive
savings
Moneyfacts
Tony
for savers
savings to 04
Wilcox,
accounts
June 2008
head of that have
establish
account will
balances
savings of
at
all
earn important
a further
£5000
Halifax, or said 2
regular savings
per centThis bonus
more.
habit."
interest rate –
means
Savers withone
that
An
taking
in added
four their
account
less than
bonus
total
balancesinterest
£5000 in can
rate
be to
used
nominated 12%
to
AER.
achieve
accountthe and
higher
therefore 12%
gross rate.*
benefiting
Savers
from a with10%
over
rate: than
£5000 in
Monthly
nominated Invested over Interest over
deposit
account and term 12 months
£25 (min)
therefore £300.00 £16.25
£500 (max)
benefiting £6,000.00 £325.00
from a 12%
rate:

Page 4
For further
details, or to
apply for the
Halifax Product example
Regular Saver
Monthly
account call Invested over Interest over
deposit
08457 26 36 term 12 months
£25 (min)
46, visit a £300.00 £19.50
£500 (max)
branch or go to £6,000.00 £390.00
www.halifaxo
nline.co.uk

Ends.
Note
Halifaxto
editors:
nominated
accounts:
Nominated Rate Gross
account
Halifax 5.50%
Websaver
Halifax with 5.25%
card
Guaranteed
Bank of 5.00%
Saver
Scotland
Halifax 4.01%
Instant
Premium
Halifax Access
Rates forSaver
Savings
2.07%
Reward
Halifax Direct
Instant 2.17%
Halifax
Account Web
Saver
Saver without
£1+
card:
4.36%
£5000+
AER/Gross
4.40%
£25000+
AER/Gross
4.45%
AER/Gross
*Source -
CACI market
data
Clare
HalifaxPress
Mortimer
Paul
Office
Fincham
07768541555
01422
391249

http://www.hbosplc.com/media/pressreleases/articles/halifax/2008-06-05-HalifaxLau.asp?section=Halifax

Page 5
 Product example

Max deposit

£500.00

£250.00

£250.00

£500.00

£250.00
£500.00

End result

£316.00
£6,325.00

Page 6
 Product example
End result

£320.00
£6,390.00

p?section=Halifax

Page 7