Nationwide - Interest Rate Question

chrisw84

Hello All,

After spending hours reading through the nationwide website and i dont want to wait till their interest date! (31st dec) i was wondering if anyone knew what would happen in this scenario

Person A has 10,000 in a nationwide current account from Jan to Dec (1 year) but takes out 8,000 in september, will they only receive interest on 2,000 on december 31st? or will they receive interest for the 8,000 they had in for 9 months aswell?

Please can someone clear this up for me :<

freddysmith

chrisw84 wrote: »

Hello All,

After spending hours reading through the nationwide website and i dont want to wait till their interest date! (31st dec) i was wondering if anyone knew what would happen in this scenario

Person A has 10,000 in a nationwide current account from Jan to Dec (1 year) but takes out 8,000 in september, will they only receive interest on 2,000 on december 31st? or will they receive interest for the 8,000 they had in for 9 months aswell?

Please can someone clear this up for me :<

My umderstanding is that interest is calculated daily so you would get interest on 10000 for 9 months and interest on 2000 for 3 months. The accumulated interest would be paid on 31 dec.

skitskut

Yes you'll receive interest on the £10,000 for all the time it was in the account and then interest on the £2,000 after you've taken out £8,000. If annual rate was say 5% and you took out the £8,000 after 9 months then interest paid after 1st year would be 10,000 * 0.05 * (9/12) + 2,000 * 0.05 * (3/12) = £400

chrisw84

thanks, i thought that they had some rules were you had to keep it in a certain ammount of time! depending on the bank?

hethmar

You would have made more money if you had put it in e-savings with them rather than just a current account.

Hungerdunger

We work out interest each day and pay it into your account once a year on 31 December

(My italics).

From this page on their website.

MarkyMarkD

As hethmar suggests, person A would do better to put the money in the right sort of account in the first place, rather than to ask how the interest is worked out. Pretty obviously, it won't earn as much interest in Nationwide's current account as in a good savings account.

Careful_ly

This is a current account not a savings account and you need to move the cash from it now. (E saver is paying 5.05%)

The flex account only pays a maximum of 3.5% on the first £3000 anything above this is earning .1%
The 3.5% is only paid if paying in each month (£1500 from August)

If as I suspect this is £10,000 has been in this account with no regular payment in the whole amount is earning .1%

The info is on the Nationwide site, go to current account, rates and charges,
then scroll down to important information.