If you saved ￡160 per month for a year, you would have had an average of 6 x ￡160 = ￡960. If the interest rate stayed at 1% AER throughout the year you would receive 1% of ￡960 at the end of the year i.e. ￡9.60. Not a great amount but it is good to get into the savings habit. I notice Virgin Money are currently offering 1.5% and, if you live near one of their Virgin money lounges, the free coffee you can get there might be worth more than the interest!

Hi. I'm opening a cash isa with has a non taxed 1% variable AER. I was wondering if I saved ￡160 a month for a year how much interest I would get if it stayed at 1%, also is the interest compound interest. Can I please have the calculation of how you worked this out.