How much interest per month would I get on a £45,000 investment?

[sandyballs]

In an account that I would probably need occasional access to?

I've been offered redundancy at work and am trying to work out how much return I would get on it if I didn't get another job straight away.

Well I would guess the very best interest rate you could get right now would be something around 5.5% per annum (though monthly interest accounts tend to pay a bit less) which would be about £500 a year, so something like £40 a month? Not enough to live on anyway

Sorry what am I talking about - 1% of 45,000 is £450, so make that about £2500 per annum. Still not enough to live on

. Blimey, thought it would be a bit more than that. Better start looking for a job. Thanks.

Ahh, slightly better, thanks. Sorry, I should be able to work this out for myself but maths has never been my strong point so thought I'd leave it to MN.

Is that tax free or do you pay tax on interest.

yeah but if you didn't mind spending the capital it would last at least a year surely?
Occasionally I try to work out how much I would need to give up work and have what used to be called a 'private income' - but it always works out as several million so yeah, I'm still working too!

Depends on your tax allowance. You probably will pay tax for anything in this financial year.

You have to pay tax on the interest unless it is in an ISA (limit £3k) or in National Savings (but returns are low)

If your savings interest is your only income, or if your total income is below the personal tax allowance then you can claim your interest gross, rather than net. You have to fill in a form (an R85, I believe) and send it to your bank to register for tax-free interest.

Based on what I earn now it would probably last about 3.5 years if I didn't work but I love the idea of having that amount of money tucked away, making me feel safe. Plus my children are 6 years old now, so no reason not to work, I think I'd be bored at home after about 3 or 4 months.

Thanks purpleturtle, that's interesting.

6.3% here

£2835pa - c £55pw - it would buy you a tankful of petrol a week!

Yes I meant you pay tax on it as any other income - so if your income is above the personal tax allowance in any given tax year you would pay tax (personal allowance is something around £5500 I think).

If you dont need the interset paid monthly then you could look at sainsburys online saver ,its 6.25% but is paid yearly. if you dont go back to work make sure you fill in the r85 inland rev form to get your interest tax free

sorry purple turtle ,you had already said that about r85. I must read the thread before I post

Icesave is paid monthly and has a high interest rate of 6.3% here. By the way, that's the gross AER, i.e. it's the rate that you would get if you left the money in the account and it compounded over the year. If you take out the interest each month it will obviously be less (but not much).