Egg internet savings ??????????

Rover · 16 January 2005 at 8:27PM

Hi folks,

Does anyone know how Egg calculates savings interest ? Is it done on a daily basis ?

How is it interest paid - monthly or yearly ?

Thanks for your help ;D

Walletwatch · 16 January 2005 at 9:15PM

If you are referring to the high-interest internet savings account, it is calculated daily and paid annually (except for the first instance, when it is calculated at the higher bonus rate of BoE rate plus 0.75%, when it is paid after six months)

Rover · 16 January 2005 at 9:39PM

Thanks for your prompt reply. So if it's calculated daily it would be an excellent stoozing account, even if you had to transfer money out after six months ?
Their web -site states:
'Access and move your money around online 24/7 with no notice.' I presume there are no 'penalties' for access ?

klondyke · 16 January 2005 at 9:43PM

'Access and move your money around online 24/7 with no notice.' I presume there are no 'penalties' for access ?

Nope ;D

Rover · 16 January 2005 at 9:46PM

Thankyou.

I've just applied for my Egg account.

Cheers. ::)

Milarky · 16 January 2005 at 10:06PM

See here:

"Interest is calculated on a daily compound basis."

This is unusal, but works like this:

If the running 'AER' is 5.50% that's ''1.055''

If the interest is compounding daily then each day the balance on the account is multiplied by "1.055 ^1/365th"

And in a week [say] the balance goes from £1000 [say] to:

£1000 x 1.055 ^7/365ths = £1001.02

Daily compounding is the 'fairest' method since if you got your interest credited to the account each month [and you used to have the option of annual or monthly interest with Egg savings] you would receive exactly the same overall interest - in 12 instalments - as if it had been paid only after 12 months - or indeed, once after 6 months, then again on the anniversary six months later [which is how this account is set up, as it happens]

Walletwatch · 16 January 2005 at 10:07PM

Thanks for your prompt reply. So if it's calculated daily it would be an excellent stoozing account, even if you had to transfer money out after six months ?
Their web -site states:
'Access and move your money around online 24/7 with no notice.' I presume there are no 'penalties' for access ?

No charges at all. The only thing you need to bear in mind, of course, is the lead time it takes for transfers from and into your egg account - they are fairly quick at it, but still allow for 3-4 working days to avoid paying interest charges on your stoozing cards.

Happy stoozing

peterbaker · 24 January 2005 at 3:07PM

***See UPDATE at foot of this post***

I ventured into "Savings & Investments" today after calling Egg to ask how my 5.5% got paid and being a bit annoyed with what I discovered. I had planned to start my own thread but it seems this one needs another angle!

5.5% was Eggs headline rate for new account holders or any existing accountholders who could be bothered to challenge Egg and wanted one too!

The rate as explained to me only lasts for 6 months before it reverts to the base rate (4.75% at the moment).

What I didn't realise, is that even in my case (I opted for annual payment of interest I think, to be sure of the best deal), I do not receive interest on "Accrued Interest".

In my case, I have had the account for about 3 months and I shall be automatically paid "Accrued Interest" on 4th April 2005 which is at the end of the 6 months. I don't know if everyone on 5.5% gets paid on 4th April or if it just coincides with my account opening.

I asked about being paid interest monthly. The response was that the rate would be "slightly less". That didn't surprise me. The agent asked if I knew about compounding of interest. Indeed I do.

He then surprised me by trying to explain away the reduced rate for accounts where customers have elected to have interest paid monthly by revealing that Egg pay no interest on the accrued interest!

PS If anyone knows that isn't true then please tell us. If it IS true then I think Egg are guilty of publishing a misleading rate.

***UPDATE***
I just called Egg again to double-check another matter and this time I was told categorically that the interest is calculated on a 'daily compund basis' and that the advice I got this morning was wrong. The culprit will be sent for reprocessing

Egg internet savings ??????????

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