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Why the interest looks "half" the headline: money drips in monthly, so the average balance across the year is about half the final total: 7% on GBP 3,000 of staged deposits earns ~GBP 114, not GBP 210. That's not a con, it's how time works: the rate genuinely applies to every pound for the days it's there. The play: fill the regular saver from an easy-access account that's also earning. Not financial advice.
What The Regular Saver Calculator Works Out
- Deposited over 12 months: the monthly deposit multiplied by the term. Regular savers cap deposits, typically GBP 25 to GBP 500 a month, in exchange for a headline rate well above easy access.
- Interest earned: each deposit earns the monthly rate for the months it is in the account, so January's deposit earns twelve months and December's one. GBP 250 a month at 7% earns about GBP 114, not the GBP 210 that 7% of GBP 3,000 suggests, because the average balance across the year is roughly half the final sum.
- Balance at maturity: deposits plus interest. Most accounts then dump the proceeds into a near-zero holding account, so the anniversary is a diary event.
- Term (advanced): most regular savers run 12 months, but some run longer or allow a shorter fixed term; the interest formula extends to any number of months.
- Feeder pot interest (advanced): the drip-feed strategy parks the whole year's money in an easy-access account and moves one deposit across each month. Both pots earn at once; this card prices the feeder's share.
- Both pots together (advanced): regular saver plus feeder interest, and the blended return on the money committed. This is the figure to compare against the headline rate.
- Easy access alone would earn (advanced): what the same lump makes if simply left in the easy-access account, and how much more the regular saver route adds. If the gap is a few pounds, the gateway hoops (a linked current account, minimum pay-ins) may not be worth it.
- Interest after tax (advanced): deducts 20%, 40% or 45% for interest above your Personal Savings Allowance (GBP 1,000 for basic-rate taxpayers, GBP 500 for higher-rate, nil for additional-rate). Cash ISAs and the Help to Save scheme's 50% bonus for Universal Credit recipients are the tax-free alternatives.