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Which Cash Isa Is Paying More? Nationwide Or M&s?

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N/wide 3.08% GROSS (2.68% AER) versus M&S Money 3.10% AER

M&S appears to be paying 3.10% AER on 1 year ISA http://money.marksandspencer.com/save-invest/savings-rates/

Fixed Rate Savings Issue 12 (Cash ISA)

Interest 1 year

fixed rate 2 year

fixed rate 3 year

fixed rate

AER/Tax Free 3.10% 3.20% 3.50%

Nationwide (old issue) Champion ISA 2.68% AER incl bonus http://www.nationwide.co.uk/savings/all_accounts/all_accounts.htm?ct=olb

Min Max Free withdrawals per year Notice period/loss of interest for additional withdrawals AER% AER% including bonus* Gross p.a.% Net p.a.%

£1 £999 1** 60 days 0.25 n/a 0.25 n/a

£1,000+ 1** 60 days 1.87 2.68 AER 3.08 gross n/a

Seems obvious enough to me that if M&S's AER is 3.08 v N/wide 2.68, M&S pays more - yet the branch only quoted me the N/wide gross of 3.08%

Is the N/wide 3.08% gross relevant or the 2.68% AER relevant for the an annual ISA savings rate? I thought it was the AER that mattered, therefore it looks like M&S Money pay more... :unsure:

Edited by inflating

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assuming both pay interest annually, it's probably because the bonus (you say it's an old issue) is being adjusted for less than a year and then this lesser % added to the non-bonus %

I still don't understand which is paying more if it's an ISA and they pay gross because there's no tax, what is the difference between the 3.08 gross/2.68AER NW are paying and the 3.10 AER/gross M&S are paying? I don't understand which one actually ends up paying me more over the year unless it really is as simple as 3.08 v 3.10

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As it’s an old issue I’m assuming you already have it? If so the 3.08% refers to return (fixed amount + bonus) over 12m from start to end of the 12m bonus period, comparable to any other isa offering 3.08% on that day in the past. The AER refers to the adjusted return from nowish to end of issue’s bonus period. If you don’t already have it (although don’t know how you could invest in a legacy issue), the return from todayish is 2.68% vs 3.1% for M&S because the NW bonus % will expire before the 12m term is up.

edit:Looked it up: "*The AER and the tax free rate are different because the fixed bonus has less than 12 months to run."

http://www.nationwide.co.uk/savings/cash_isa/championisa/ratehistory.htm

OK I think I get it, thanks for your patience on this. So as it is a legacy one yes then I don't do any better transferring to M&S for the period to the end of the bonus (July 2012). I only do better if I keep the M&S one a whole year from now, I think is what you mean.

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  • 277 Brexit, House prices and Summer 2020

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