I can't do the maths.

Although "paid" on maturity I would expect it to be calculated, and thus compounded, periodically - either annually or more commonly, I think, quarterly.

3% compound interest means that the original sum will double in 23 years.

if not compound then it would take 33 years.

 

With interest rates being so low the Interest is probably not worth having for most people ... and on that basis better to stick it in Ernie - might get nothing, might get a bit, very slim chance of getting a fair bit

 

Will get back on this .......
Off to the races at Newmarket to reinvest my hard earned interest........

 

Sod the 3%
where are you getting £250 from !

 

You can (could?) get that on new accounts where you paid in a regular amount each month, say a minimum of £250 (and there's max amounts), but you only get this rate for the first year, so you'd need to create multiple new bank accounts every year and set up multiple DDs to circulate your money through them.

We thought about doing that (but anybody else be warned that this could adversely affect your credit rating - we don't need to borrow money as we manage on what we've got) but it seemed like loads of hassle to get a few extra quid above what we could get from locking in our hard earned savings for a couple of years or so.

I have gave Mrs Scrungee (who doesn't earn anything) all my savings some time ago, so we don't pay any tax on the interest.

 

Intrest rates are so low I was thinking of filling the void that has partly been left by Wonga.
Sod 3%.
I quite like the rates they were getting for investing a small amount of cash.

 

After recently learning what happened to my mate's parents, I now think a bad credit score is a good thing, at least once you've done whatever borrowing you need (ie got your mortgage).

My mate's parents had a nice little semi. Owned outright, mortgage fully paid off years ago. That was until some debt collectors tracked him down for the £20,000 he'd allegedly borrowed and not paid back. Even the coppers that investigated presented evidence to the court that proved a rock solid case of identity theft (the electronic paper trail led to China), but the court still ruled in favour of the lender. This presented a new problem, having already spent thousands fighting his corner, he had nothing left to pay this £20k plus costs. No problem decided the court, which simply granted the lender permission to claim the house as capital against this alleged £20k debt.

Having learned of this, my philosophy now is to ensure I miss the odd credit card payment here and there, maybe apply for loads of loans every now and then, and maybe get the odd default here and there. The sad truth is we are largely in the hands of the banks, even if we choose not to deal with them. As far as I'm aware you can't ask the credit reference agencies to always say no to credit applications, so the only way to make sure nobody runs up a massive debt in your name is to simply be a bad debtor yourself from time to time.

 

Trunky said: ↑
Sod the calculations.

Where are you getting 3%?

That's what I'd like to know.
Click to expand...
Sod the 3%
where are you getting £250 from !

Ok, so If you have a Lloyds bank current account and £1500 a month is payed in..........and you save between £25-£400 in to a Lloyds monthly saver you did received 3% on maturity.
It is now 4% gross.

 

@roders I see you disagreed with my viewpoint ...

£250 x 12 months = £3,000. Ernie will pay out on average £25 (tax free), 3% interest would be £40-50 (tax is payable). At worst you would get nothing, and thus lose £40-50 interest (less whatever your tax rate is), an average payout for a higher rate tax payer is about evens, and with some luck you would get more.

My point was that many people might think that £40-50 interest on a £3,000 sum wasn't going to make much difference to them, and thus taking a "punt" is at worst risking them £40-50 ... the original capital sum is safe and can be withdrawn at any time (although worth choosing the timing within the month, if you can, as withdrawing it immediately after a draw is obviously better than just before ) ... which ain't the case with the GG's at Newmarket ...

 

Agree entirely, instead of a paltry return of less than £1/week before tax it's cheaper having a punt on 'Ernie' instead of paying £2/week for a lottery ticket.

 

Can't win £140M on ERNIE though ... mind you, don't reckon I'm going to win it on Euro Millions eh?!

If you all get a shiny new Ferrari in the post you'll have an inkling though I suppose

 

Saving ,gambling it's all about choices and chances.
banks ,shares, lottery, premium bonds, football pools, horses etc. etc.
I think that a careful portfolio of each to suit your personal circumstances and how much fun you want or can afford.......up to you.
So Kristen..........teach but don't preach......

 

I'd say invest in property but that doesn't seem possible now ... certainly not in the UK.

Glad we did it when we did (in our 30s/40s) ... now own five properties without a mortgage! Please don't think I'm bragging .. it was years of 'hard labour' and 'no frills' but now enjoying the fruits of our labour in our retirement years.