Can anyone explain savings account interest rates to me please?

[IlanaK]

When I have been comparing them online, they give three different rates: AER, Gross and Net. I have no idea what this means!!!

gross is the rate they pay per year. net is what you actually get after tax (i.e. the rate you actually get unless you don't earn anything and fill in a form to say so).

aer is the equivalent gross rate which you get over a year if you leave all of the interest in the account. if interest is paid monthly, the aer will be slightly higher than the net rate (because you'll get interest on last month's interest). if it's paid yearly it will be the same.

Gross is before tax, net is after tax.

AER is what you would get if the interest were paid annually, rather than daily or monthly.

Oh dear. That puts a whole different spin on myfinances then. Thanks for explaining that. I was working it out based on the AER which is wrong then as i need to use the interest only each month to pay the rent.

If I put it in my name (since I don't work) even though my husband works, can I get the gross rate?

If it falls within your annual tax allowance, especially if not earning, you can have it paid gross

No, it will be outside my tax allowance. So basically I should be looking at the net rate then. That is a huge blow.

If you inadvertently claimed it gross you'd jsut have to pay up at the end of the Tax Year anyway with a tax return but think the form to claim it gross declares that it falls within your personal allowance.