The hammer rang once. A spark jumped off the anvil and did not go out. It waited. They followed.

It was the first Saturday of January, and the Green looked tired after the holidays. The lights were still up on the bookshop but nobody had switched them on. Tara walked past the Green Building Society on her way to the café, the way she did every week, and then she stopped and walked back.

There was a new poster in the window. It was bright orange, with a white number on it so big that it filled half the glass.

REGULAR SAVER 6%

Underneath, in smaller letters: Save up to £200 a month. Fixed for 12 months. Our best rate ever.

Tara stood on the pavement and read it three times.

Her own savings account paid four and a half per cent. She had thought that was good. Her dad had helped her choose it in the summer, when she had first started her Saturday job and had first started thinking about next September. Next September she would be going away, if she got in anywhere. There was a deposit for her first term's room, and it had to be paid by the end of August. So since the autumn she had kept a plan on a folded sheet of paper in her bag. It said, at the top, £127.50 a month, every month, for the deposit.

Six per cent was a lot more than four and a half. It was a third more. It was the best rate she had ever seen on anything.

She went into the building society and took a leaflet from the rack by the door. It was orange too, folded in three, with the same big white number on the front. She put it in her pocket. She felt excited and a little dazzled, as if she had found money in the street.

Then she went to the café to tell everybody.

"I was going to say I'm moving everything," Tara said.

She put the leaflet on the back table, face up, so the six faced the ceiling.

Danya was there, building a tower of sugar cubes and trying not to be seen doing it. Across from him sat Cyrus, who worked the till at the electronics shop on Saturdays. Cyrus read every finance leaflet the shop had. He had once spent a whole lunch break explaining to a customer why a television at nine pounds a month was not nine pounds.

"Six per cent," Tara said. "I'm going to save one thousand five hundred and thirty pounds this year. That's twelve lots of a hundred and twenty-seven fifty. Six per cent of that is ninety-one pounds eighty. In my account now I'd get about seventy. I'm signing up this afternoon."

It felt good. Ninety-one pounds was a lot of Saturdays. It was money for doing nothing at all.

Cyrus picked up the leaflet and turned it over. He did not look at the front.

"Read the line under the big number," Cyrus said. "There's always a line. Then add up every payment, month by month, before you sign anything."

"Why? It's six per cent. It says so."

"Small payments, big total, I say to people at the till," said Cyrus. "It works the other way round too. Your total isn't in the account in January. You're paying it in a bit at a time."

"How do we know that matters?" said Danya, without looking up from his tower.

"Watch," said Cyrus.

Cyrus took a pen from the jar on the counter and a paper napkin from the pile. He wrote twelve lines down the napkin, one for each month, January at the top and December at the bottom.

"Add up every payment, one at a time," said Cyrus. "Your January money goes in on the first of January. How long does it sit in the account this year?"

"Twelve months," said Tara.

"And February's?"

"Eleven."

"And December's?"

Tara stopped. "One," she said slowly. "Just December."

Cyrus wrote the numbers down the side of the napkin. Twelve, eleven, ten, nine, eight, seven, six, five, four, three, two, one. Then he drew a line under them and handed the napkin to Danya.

"Who checked that it adds up?" said Danya. "Give it here."

He added them in his head, twice, moving his lips. "Seventy-eight," he said. "Seventy-eight what?"

"Seventy-eight payment-months," said Cyrus. "Not one thousand five hundred and thirty pounds sitting there for a year. One payment for twelve months, one for eleven, all the way down. It adds up to seventy-eight months of a hundred and twenty-seven fifty."

"Hm. So what does that come to?" Tara asked.

Cyrus did it on his phone. Six per cent a year is half a per cent a month. Half a per cent of a hundred and twenty-seven pounds fifty, seventy-eight times over.

"Add up every payment and it's about forty-nine pounds seventy-three," said Cyrus. "Call it fifty."

Tara looked at the napkin. Then she looked at the six on the leaflet.

"Not ninety-one," she said.

"Not ninety-one," said Cyrus. "The rate's real. It's just that the rate is for money that's in the account for a whole year, and most of yours isn't. Borrowing costs something, even when it says it doesn't, and saving pays less than it says when you pay in slowly. Same arithmetic, other way round."

"Says who it's the same?" said Danya.

"The napkin does," said Cyrus.

Tara picked the leaflet up again and, for the first time, unfolded it all the way.

Marcus came in with three envelopes held together by a bulldog clip. Marcus kept all his money in envelopes, labelled in thick marker pen. Bus. Lunches. Mum's birthday. Not yet. He said it was old-fashioned and that it worked.

He read the leaflet and the napkin and nodded.

"What's the money for?" Marcus asked. "Not the six per cent. The money itself."

"The deposit," said Tara. "For my room. In September."

"When do you have to pay it?"

"The end of August."

"Then write the plan before the money comes," said Marcus. "Your deposit isn't due in December. It's due in August. How many payments is that?"

Tara counted on her fingers. "January to August. Eight."

"How much do you actually need? Eight lots of a hundred and twenty-seven fifty," said Marcus. "One thousand and twenty pounds. That's your deposit. How long is this account fixed for?"

Tara read the leaflet. "Twelve months."

"So when do you get to take the money out?"

She read it again. Then she found the line Cyrus had been talking about. It was at the bottom of the inside page, in grey type a little smaller than the rest, but it was there. Nobody had hidden it.

If you close your Regular Saver before the end of the 12-month term, interest for the whole term will be paid at 1.5% instead.

Tara read it out loud.

"Give every pound a job," said Marcus. "Your job for these pounds is August. So this account would have to close early. Then you'd get one and a half per cent, not six."

"How much is that?" Danya asked.

Cyrus wrote another column, shorter this time. Eight months, seven, six, five, four, three, two, one. Thirty-six payment-months by the end of August.

"Read the line under the big number: one and a half per cent on that is about five pounds seventy-four," said Cyrus.

Nobody said anything.

Five pounds seventy-four. Tara had walked in thinking about ninety-one pounds eighty.

"I think we missed someone," Tara said. "Me in August. I was only thinking about me in January."

Devon arrived last, as he usually did, with a library book under his arm and his coat buttoned wrong. Devon answered almost every offer with a question about Sundays. He said everything cost you something, even when it was free, and the trick was to say out loud what you were giving up.

He listened to the whole story without interrupting. Then he put his finger on the napkin.

"What does it cost you?" Devon asked. "Not in money. What's the next-best thing you'd give up?"

"My old account," said Tara. "The easy one. Four and a half per cent."

"Then say what you'd be swapping," said Devon. "Put the easy account next to this one, for the same eight months."

Cyrus did the sum again. Four and a half per cent, thirty-six payment-months.

"About seventeen pounds twenty-one," he said.

"What's the next-best thing, if the deposit is due in August?" said Devon. "The easy account pays about seventeen pounds, and closing the new one early pays about six. The difference is about eleven pounds."

"Eleven pounds," said Tara. "That's it?"

"Every yes is a no to something, and that's the money part," said Devon. "But it isn't the whole cost. Think about what else you'd be swapping. With the easy account you can get at the money any time. If your laptop dies again in March, or your train fare goes up, or the boiler breaks at home, it's there. With the regular saver, it's locked until next January, or you lose the rate."

"Not in money. In Sundays," Devon added, smiling. "And in nights lying awake."

"Hm. So the easy one is better," said Tara.

"Every yes is a no to something. I didn't say that," said Devon. "The easy one has its own cost. You can get at the money any time. That's the problem with it, too."

They walked back to the building society together at half past twelve, because Tara wanted to ask about it in person before she decided anything. Hana came with them. She had been at the library and had seen them through the window. Danya came because he wanted to see what the inside of a building society looked like.

On the way, Tara rang her dad.

"Keep it simple," her dad said. He was at the supermarket and kept stopping to read labels. "One account you can see. Don't go chasing rates for a few pounds. I've done that. You end up with five accounts and you can't remember the passwords. Eleven pounds isn't worth the worry."

It was the strongest version of his argument, and he had learned it the hard way.

Hana disagreed, and she had thought about it more than Tara expected.

"I'd do the regular saver anyway," Hana said. "Not for the rate. Because you can't get the money out. I've got an easy account too. I've taken money out of it six times since September, every time for something I didn't really need. If you can't touch it, you keep paying in. That's worth more than any rate. Your deposit only gets saved if the money is still there in August."

"I was going to say, I need it in August," said Tara.

"So save the deposit somewhere you can reach," said Hana, "and put something else in the locked one. Something you won't need until next year. Your summer money, or whatever's left over after the deposit."

Tara had not thought of that.

"Let me listen first," Tara said, when Danya started to argue with Hana on her behalf. She stopped on the pavement outside the bakery and took the folded plan out of her bag.

She had thought, that morning, that the question was which number was bigger. It had felt like a test with one right answer, and she had been pleased to find it so quickly. Now there were more questions than there had been. What was the money for? When would she need it? What would she do if something broke? Would she really leave money alone that she could reach? She knew the honest answer to the last one, and she did not much like it.

She wrote two words in pencil at the bottom of the plan: August and after. Then she drew a line between them. The deposit was August. Everything else was after. They did not have to live in the same place.

"I think we missed something," Tara said. "Not everything I save is for the same thing."

Hana nodded, as if that was what she had been trying to say all along.

Inside, a clerk with a green lanyard sat behind the counter. Her name badge said Ms Lindqvist. She was patient and clear and she did not try to sell Tara anything.

"Everything's on the leaflet," Ms Lindqvist said. "We print every line, including the early-closing rate, because people should know before they sign. Some people use the regular saver for money they're sure they won't touch for a year. Some people use it because they know they would touch it. Some people shouldn't use it at all. It depends what the money's for."

She slid a form across the counter. It had a box at the bottom marked Your instructions.

Danya leaned over Tara's shoulder.

"How do we know eleven pounds is worth all this?" said Danya. "It's a whole Saturday afternoon. That's like two cinema tickets."

Nobody answered him, because nobody was sure.

On the counter in front of Tara were the orange leaflet with its big white six, and Cyrus's napkin with its two columns, seventy-eight and thirty-six. There was Marcus's question, what's the money for?, and Devon's, what does it cost you? There was her folded plan with £127.50 a month at the top and end of August underlined twice. There was her dad's voice saying keep it simple, and Hana's saying you can't get it out, and that's the point.

Ms Lindqvist held out a pen.

"What would you like to do?" she asked.

Tara looked at the empty box marked Your instructions.

 

 

(Write the line Tara writes on the form.)

 

The spark dimmed to a warm dot and settled back on the anvil. The Green was just the Green again.

Back on the Green

That afternoon Lan, who was seven, was saving her pocket money in a jam jar for a kite.

Danya told her that if she put it in a bank, the bank would give her extra. Lan asked how much extra. Danya worked it out on the back of a sugar packet and said, for her jar, a few pence by the summer.

Lan asked when the kite fair was. Danya said July.

Lan thought about it for a long time, and then said she would keep the jar, because she could see it, and because if the bank had it she would have to ask for it back.

Danya said that was the most sensible thing anybody had said all day.

Afterword. The idea in this case is that interest is earned only on money while it is in the account. A rate is quoted per year, for money that stays in for the whole year. When you pay in a little at a time, most of your money has not been there long, so a year of monthly payments earns about half what the rate seems to promise on the total. A fixed term matters too: an account that pays well only if you leave the money for twelve months is a good fit for money you will not need for twelve months, and a poor fit for money you need sooner. Before you choose, write down what the money is for and when you will need it, read the line under the big number, and say what you would be swapping. You can practise adding up payments and comparing totals in LedgerQuest.