help please

[rabbits]

Am rubbish with maths, can anyone help? Am trying to find the best place to put �12000. On tesco website they have a savings account and using their ready reckoner of 4.5% it calculates in one year it will grow to �12,452. The Halifax, where money is now have a Liquid Gold account which pays o.60% gross PA. What would �12,000 earn in one year in this account, and which is the better deal? Thanks.

[dancecaller]

Are you a taxpayer? If so put �3,000 of it into a cash ISA. http://www.moneysupermarket.com/isa/

[Loosehead]

well 0.6% is a lot less than 4.5%. You sure that's correct for the Halifax?

[dancecaller]

Some banks and building societies try to sell you investments in shares or linked to the Stock Market growth. Don't touch these unless you understand the small print and are prepared risk of getting no interest or even losing your money.

[dancecaller]

Yes its 0.60%. Thats because its a branch based account (with a pass book I think). A lot of banks and BS have accounts like that.

Telephone or internet accounts are a lot better.

[dancecaller]

What you need to look at is the AER, this tells you how much �100 would earn in a year.
So at 4.5% AER you earn �4 50pence on �100 or �540 on �12,000
At 0.60% AER only 60pence on �100 or �72 on �12,000

I don�t understand the Tesco site, it comes up with funny answers. And the rates may have changed since you looked as now you only get 4.5% if you put in �50,000.

Some accounts pay interest monthly, some pay annually, some have a good rate (bonus) for a few months and then it goes down again , but the AER smoothes all this out and is a fair comparison

The AER gross tells you what you earn before paying tax. AER net what you get after they�ve taken the tax off. (If you don�t earn enough to pay tax, or it�s a child�s account ask for a form so they can pay you gross)

[dancecaller]

Have you already got an account somewhere. Some banks & BS have special rates for loyal members.

Otherwise if you can leave �3,000 for 2 years West Brom Isa is 5.1% fixed for 2 years. And look again to see where to put another �3,000 next April.

Birmingham Midshires has an internet account that pays 4.8 for the first year, but goes down to 4.3 after that.

ING and Halifax internet accounts give 4.5

Northern rock has a Silver saver telephone account for those over 50 with an AER of 4.73

All these are Gross rates

[dancecaller]

If you haven't got you own internet the ING can also be used by phone.

0800 376 2828 or ingdirect.co.uk for details

I've been happy with that account

[dancecaller]

As you are already with Halifax you can get a good ISA with them for that part of the money, save all the hassle of identification to open an account with a new bank.

But get out of that liquid gold as soon as you can, I would say Halifax Websaver, or ING

http://halifax.co.uk/savings/home.shtml

[dancecaller]

I think you have to have a Halifax Current account, to get the Websaver, with ING all you need is �1, but you'll need to send proof of identity and address, they'll tell you what they need.

[Ethel]

Lots of good, unbiased advice here:

http://www.moneysavingexpert.com/savings

[lady_p_gold]

Or you could get �12000 of premium bonds and ask for the prizes to be added on to the total .. its not a guaranteed return but you should win quite often and it might always be a big prize !