01.29.09
Posted in Uncategorized at 4:57 am by Twm
Well, the constant fall in interest rates are not good for savers. Even a year ago it was not uncommon to see a top rate of 6.75% AER. I.e £67 quid for every grand held for a year.
Desperately searching the money boards, the best easy access savings accounts I could find were at 3.6% AER. At almost half the heady heights of a year ago, after Tax this rate is unlikely to beat inflation (which fell to 3.1% in December).
In times of plummeting interest rates, it’s best to lock your money into a fixed rate account. The most common form is a one year fixed term bond. However, most of the rates on these are pretty poor and you have to lock up your cash for a year.
There is however another, often overlooked type of account which offers a fixed rate for a year, and if you are lucky you might find one at a whopping 8%. These are the regular saver accounts.
Regular saver accounts may have had more bad press than they deserve. It is true that banks use the eye catching rates to lure new customers (often you require a current account with the bank first). But there’s no reason to shy away from them.
Why do regular savers have a bad name?
The accounts do indeed pay an unbeatable amount (say 8%) which is the best you are going to get for new savings coming from your income. However, the regular saver accounts have a carefully calculated maximum monthly deposit of around £250. This means that you are only earning 8% on the first £250. The following month’s £250 deposit only gets 11 months exposure, which yields 7.2% return at the end of the year (roughly 8%/12 * 11 months), and ever diminishing returns for subsequent months.
It’s also worth mentioning that most regular savers do not pay interest on interest. The interest is calculated on the balance each day but paid into the account at the end of the year, further eroding the lustre of the 8% sign.
To cut to the chase. If you pay the maximum each month @8% AER, then at the end of the term you will have paid £3000 into the account and the bank would give you around £130 quid, or 4.35% of your investment back as interest. Many naive investors expect 8% of your £3000 back, and are disappointed when their final interest falls short of their expected £240 quid.
Although a quick lesson in AER helps to educate savers, the banks still don’t make it easy to calculate actual annual return or to compare it with other financial products.
Tricklenomics
Saying that though, a year on and our regular saver’s 4.35% annual return on £3000 is still better than the aforementioned savings accounts. This makes them a surprisingly feasible vehicle for investing a lump sum.
If you already have £3000 in a flexible saver (earning say 3.6% AER), then you can transfer £250 a month to get the better rate. And while the money is waiting to move to the higher rate, it’s still earning some interest at the flexible saver rate.
Lets try some scenarios. Here are two suitable accounts I found on the market:
- Tesco Finance account paying 3.6% AER (interest charged per day, paid in annually, no penalty unlimited withdrawal)
- HSBC Regular saver paying 8% AER (interest charged per day, paid in annually, no withdrawal)
Scenario 1 – Keep your £3000 in Tesco flexible saver
1YR Gross Interest: £108.00*
Scenario 2 – Trickle £250 a month from Tesco Finance into regular saver
1YR Gross Interest From Tesco: £49.27*
1YR Gross Interest From HSBC: £130.52
That’s £180 gross interest or £72 more than using the standard saver alone. At 6% gross, even after the basic rate of TAX has been deducted, it beats most ISAs.
So what are you waiting for you rate tart!
*These are not fixed for the year and may rise or fall – so only use as an indicator.
Disclaimer: I have no training or authority in financial advice. Do your own sums and make your own decisions or talk to a qualified financial adviser. Some regular savers require you to open a current accounts which pay a poor level of interest (~0pc) – make sure you take this into consideration.
See also:
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01.27.09
Posted in Uncategorized at 7:53 pm by Twm
Quick tip. If, before Christmas you were seduced by the free postage offered by the trial of Amazon prime then be aware that the upgrade to annual prime membership works on an opt-out basis. At the end of the trial, you will be charged £47.00 as the upgrade takes place automatically.
Rather then relying on your memory, you can opt-out at any time. If you log into your Amazon account
Your Account > Your Amazon Prime Membership. There is an option to turn off the automatic upgrade. This still allows you to use the prime until the introductory offer ends, but allows you time to work out if an annual subscription is favourable to your purchasing patterns.
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Posted in Uncategorized at 5:34 am by Twm
Once consequence of blogs, is that they have all but removed the need for the hoi palloi to hand craft their own sites in notepad. The ready made shrink wrapped templates mean that a site is ready and waiting for the content.
It occurred to me the other day that a consequence of this was that sightings of the ghastly “under construction” signs that adorned 90% of the web back in the late nineties are now rarer than white dog poo.
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Posted in Uncategorized at 5:23 am by Twm
I have a Twitter account, but have so far not found a good use for it. Being part of the tech world, it’s sort of due diligence to keep abreast of the latest trends. I consider myself a late adopter though I tend to adopt eventually. I have been found commenting on other people’s photos on Flickr, editing css in the awful SQL wrapper that was myspace, and I’ve had a scrabble match which lasted 3 days on Facebook.
However, I found it very hard to be enthusiastic let alone understand a technology that you have no real use for. Doing your ‘research’, i.e. creating an account and messing about for an hour, or downloading software to your phone and using it for a day is not enough – it lacks the ecological validity of a real experience.
Shazam is just a very clever demo until you find yourself a few months later in a coffee shop which is playing an infectious 1930 jazz rarity and suddenly, the identity of the tune becomes the most important pursuit of the minute and Shazam for a brief moment becomes perhaps even useful.
Listening to Stephen “I have never seen a SmartPhone I haven’t bought” Fry. It’s hard to imagine anyone I’ve met in the industry talking about phones with such gusto and geekyness. Paying too much attention to Fry makes me feel like I’m in the wrong industry, but then I’m reminded that amateur enthusiasts often have a lot more affection for the field that they are not bound to (Fermat – the hobbyist mathematician springs to mind).
Just as someone who works on building railways doesn’t necessarily care much about the interiors of trains. There are an awful lot of very conservative, late adopters who work in the mobile software industry. Not only are there engineers who are interested in the technical challenges of a developing such a constrained device, yet have little interest in the end product, but you will also find them in the marketing meetings waxing glibical about some feature or trend that you know they will never use or truly understand themselves.
If you are not of the ilk that can just hammer away at technology for the sake of technology, then you might find the onslaught of the new services utterly exhausting and so you try and ignore them while all the while adding drip by drip to your pool of status anxiety. In the end, it’s either curiosity or social proof that brings you to a new service : when most of your friends do something, you start to take an interest for fear of missing out.
Although I’m sceptical about the true importance of social networking, lets face it if all your friends are on facebook then it’s a damn sight easier to arrange group events and post aftermath photos using facebook tools than any other method. I’m not sure if that was Facebook’s original goal, but certainly all of these services have benefited me in ways tangential to my original expectation (I’ll post some examples in future posts).
So, I won’t be closing my Twitter account just yet…
Perhaps the following story justifies the existence of Twitter alone:
http://www.davidhenderson.com/2009/01/21/key-online-influencer/
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01.04.09
Posted in Uncategorized at 7:44 pm by Twm
In case you ever wondered what sprouts look like attached to their life support :
These are in the Allotment, and right tasty they are too steamed with a bit of butter. Just don’t let the Gorillas have them.
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01.02.09
Posted in Development, Uncategorized, re-factoring at 2:45 am by Twm
I spent a few evenings in December updating a charity’s web site to use a CMS system based on Wordpress. The bulk of the work involved mirroring the original site design as a Wordpress PHP+CSS template. Unfortunately, the original site was auto generated by a tool on the Mac and the mess it generated was pretty impenetrable and full of unused styles. I used Firefox’s defacto debugger FireBug to inspect the CSS of the final rendered document and created a minimal CSS which incorporated only the relevant style information.
That worked pretty well until I came to test the page on Internet explorer (still the most popular browser on the net).
IE support doubled the development time, and worst of all (as an engineer): The solution was a set of fairly arbitrary changes to the CSS (following this guide) and I don’t fully understand why the changes worked. Adding a “position:relative” magically fixed a number of problems with margins – most unsatisfying.
Sneeky Plug-ins
One of my favourite FireFox plugins is Scrapbook. Scrapbook provides a simple way of organising ’scraps’ of content from web pages, allowing you to annotate, highlight and save within a folder structure – all while retaining a link to the original.
One day Scrapbook stopped working. The plug-in failed to show in the UI (despite being activated) and I re-installed to no avail. Through a process of elimination found that it clashed with Add-on called “Microsoft .NET Framework assistant”:
Ok, so having found the culprit, I then wonder how such a plug-in got on my machine. It is installed without option as part of the .NET Framework 3.5 SP1 and assists in the deployment of .NET “ClickOnce” applications. It also alters the user agent of the browser to report the version of .NET supported on the PC.
The MS add-on can be disabled, which cures the scrapbook clash, but not removed*.
As I’ve mentioned before, open systems and stability are in direct conflict. There is a balance between the two which can be achieved through vetting, testing, user feedback and frequent updates – most of which falls apart with clandestine plug-ins.
Full inter op testing with all available plugins is combinatorially impossible, so s/w must make it easy to allow users to attribute blame and quickly roll back. However, the frequent updates pushed over the net (acrobat, itunes, firefox, windows) make this much more difficult than a few years ago.
For 2009, I want to spend less time debugging and more time creating.
*Instructions for removing using REGEDIT here.
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