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Abbey advance overdraft interest calculation
Dagobert
Posts: 1,625 Forumite
Could someone confirm Abbey's advance overdraft interest calculations, please?
Account
My understanding of Abbey Interest Rates is that the Advance o/d EAR is 19.9% in this scenario.
Questions
I was told that the calculations are so complicated, only a Financial Advisor at my branch could explain this to me.
Account
- Preferred In-Credit Rate Account
- monthly pay-ins < £1000
My understanding of Abbey Interest Rates is that the Advance o/d EAR is 19.9% in this scenario.
Questions
- debit card payments: which date is relevant for in-credit and o/d interest calculations: the date the payment was made or the statement date (2 days later)?
- If you were overdrawn, within the advance overdraft limit, by £100 for 4 days, would the calculation be
19.9 * £100 * 4 / (365 * 100) ?
I was told that the calculations are so complicated, only a Financial Advisor at my branch could explain this to me.
Dagobert
0
Comments
-
A letter and follow-up phone-call from Abbey revealed how they treat debit card payments with regard to interest:
While the statement date reflects the date the merchant requested the funds, the relevant date for interest calculations is the day the transaction was made. In other words: interest is based on the available balance, not statement balance. This means that you cannot calculate your interest from your statement.
Abbey's procedures are different from various other banks': HSBC, Halifax, Lloyds TSB, Cooperative base their interest calculations on the statement balance.Dagobert0 -
Thanks for the formula, but what counts as a day, one minute or 24 hours? I normally check my account first thing in the morning and transfer money from my abbay savings account into my current account if I am about to go overdrawn. I thought this was fine (ie interest free), but recently Abbey seem to have started charging this as a day even if I am back in credit before 9am.
Also interest charge that appears on my account 8th June is for the time I was overdrawn in April I think, but staff at Abbey give me different answers0 -
The 24-hr period between cut-off points. I am not sure what Abbey's cut-off time is, possibly 17:30.what counts as a day, one minute or 24 hours?
You need to be a bit more precise. As I detailed in post #2, debit card payments are treated differently with regard to the statement date.recently Abbey seem to have started charging this as a day even if I am back in credit before 9am.
If you have a Standing Order set up, which takes you overdrawn (within your limit), and you then top up the account before the cut-off point, you should not be charged.
Also, if an outgoing cheque is debited taking you overdrawn, a timely top-up should prevent any charges.
It clearly tells you on page 1 of your statement what you are going to be charged for and when.Also interest charge that appears on my account 8th June is for the time I was overdrawn in April I think, but staff at Abbey give me different answers
Charges are applied in the following statement period.
No point in asking. Frontline staff does not have the competence to answer questions like that. My experience is that they did not even understand how their overdraft charges are applied.staff at Abbey give me different answers
You may also want to have a look at the thread Abbey instant overdraft interest.Dagobert0
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