Can you get compound interest in the UK?

Question

If I was able to save around £500 per month what's the best rate I could get safely without putting my money at risk? a friend of mine says there's something by that name in the United States, can you give me some tips on how I can save and earn a good rate of interest at the same time?

Thanks.

Answer 1

The two previous answers have already covered what compound interest involves.  However in terms of trying to get the best rates of interest available I would certainly recommend walking up the high street and just popping into all the banks and building societies, but mainly building societies, to see the different rates they have available.

Also you need to think about how long you want to tie your money up for.  The longer that you are willing to do this for you will see slight improvements in the rate of interest available.

I am not sure what rates of interest you are expecting, but on the high street you can probably get something around 6% per annum from quite a few building societies if you are able to put your money with them for a year.

I agree with the 2nd respondent to your question, that there isn't a risk free solution, although if you have savings of less than approximately £30,000 with a UK bank this will be protected by the Government.

Answer 2

Compound interest is interest paid on interest. Without putting your money at risk, you probably won't be able to generate much interest at all.

Answer 3

Compound interest is just where the interest is paid into the account rather than over to you and earns interest itself - so that would be most bank & building societies!

The best rates are usually the ones you can't get hold of easily.

Answer 4

Do a yahoo search for "savings comparisons".  I did, and lots of useful sites came up.  All worth a look.