what's the point of putting money into a savings account in that case rather than you current account?
Isleofman you say that the interest rate you were offered was 10 percent. This seems massive.
save for 1 year leave for 5 years interest 7 percent, aer 1.24 percent tax free". Just back to my original question if I put 5000 into that what would I earn after 1 year.
Like what is aer?
The Annual Equivalent Rate is designed to make savings accounts easier to compare. The AER can show a truer rate than a Gross rate, as it takes into account more factors, and also assumes that you keep your money in a particular savings account for a year.
The AER or Annual Equivalent Rate is the official rate for savings accounts, and is designed to allow easy comparisons as it's meant to smooth out the variances between accounts (it's the equivalent of the APR for debts).
The idea is it shows what you'd get over a year if you put money in the account and left it there. The alternative is the gross rate, which is the flat rate of interest that's actually paid.
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