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  • FIRST POST
    Cardew
    Santander 123 account interest payments.
    • #1
    • 24th Jan 13, 2:16 PM
    Santander 123 account interest payments. 24th Jan 13 at 2:16 PM
    I have been unable to work out how Santander calculate their interest payments.

    The promotional literature for the 123 account states the following:


    Interest - on your current account balance:
    • 1.00% AER/gross (variable) on balances from 1,000
    • 2.00% AER/1.98% gross (variable) on balances from 2,000
    • 3.00% AER/2.96% gross (variable) on balances from 3,000 and up to a maximum
      of 20,000.
    Interest rates will apply on the first 20,000 of your entire balance once you have at least 1,000 in your account
    I sent this secure message to Santander


    Can you please explain how the 3% interest on balances in the 123 account works please.

    Your leaflet states: Interest - on your current account balance: "
    1.00% AER/gross (variable) on balances from 1,000

    2.00% AER/1.98% gross (variable) on balances from 2,000

    3.00% AER/2.96% gross (variable) on balances from 3,000 and up to a maximum of 20,000.

    Interest rates will apply on the first 20,000 of your entire balance once you have at least 1,000 in your account."

    If I have an average balance of, say, exactly 10,000 for the month. Do I get?:

    1,000 x 1% divided by 12

    2,000 x 2% divided by 12

    7,000 x 3% divided by 12

    Or 10,000 x 3% divided by 12.
    It did occur to me that it could mean no interest on the first 1,000, then 1% from 1,001 to 2,000, and 2% from 2,001 to 3,000 and 3% from 3,001 to 20,000.

    Their reply:




    Thank you for your email.

    I can confirm that if your balance is an average of 10,000 you will receive 3% Gross interest on the full balance.
    I hope this information is useful and if you have any other queries,
    This seems not to be happening for my account so I sent the following:


    Good afternoon and thank you for your prompt reply. I cannot reconcile your reply with the interest received on the two satements I have received since starting the 123 account.

    My Statement of 16 Jan 2013 shows an average credit
    balance of 13,994.85 and interest paid from 15/12/12 to 15/01/13 was 32.70.

    By my calculations 13,994.85 x 3% divided by 12 is 34.99 - a difference of 2.29

    My 15 Dec 2012 statement shows an average credit balance of 6,000.81 and interest paid of 13.72.

    Again by my calculations 6,000.81 x 3% divided by 12
    gives interest of 15 thus a difference of 1.28

    Could you please explain where our methods differ and if I(or you) are making a mistake.
    Anyone got any thoughts on this situation?
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