natwest isa 7.32%

rs151

I have a number of ISAs with various providers and would like to consolidate them all into one. I went to Natwest today to ask for ISA transfer forms and was told that I could only have one transfer form as apparently tax regulations mean that I can only transfer one ISA from one holder into the Natwest account.

Is this correct? Does this mean that I cannot consolidate all my previous ISAs?

Baldur

rs151 wrote: »

Is this correct? Does this mean that I cannot consolidate all my previous ISAs?

No, the information that you have been given is absolute rubbish - see Chapter 11 http://www.hmrc.gov.uk/ISA/isa-guidance-notes-2008.pdf

rosepetal37

Has anyone checked their online statement today for the interest credited yet?

Assume a rate of 5.2%

so I do the 365th root of 1.052 and power this to 20 (since my account was credited on October 11) and take away 1. This gives 0.002781566, which I multiply by my balance to work out the interest - which is remarkably close to the amount I've been paid.

The only explanation I can think of is the rate has been 7%, but interest has only accumulated from the cleared date, which I didn't think was the way they worked out their interest?

shazkhan111

went in to natwest branch on friday, advisor told me (i didnt even ask) that interest on the transfered isa/money would be paid from friday 31/10/2008.

This is contrary to this thread and my understanding, i thought only nationwide paid "backdated" interest.

Anyone clarify please?

masonic

shazkhan111 wrote: »

went in to natwest branch on friday, advisor told me (i didnt even ask) that interest on the transfered isa/money would be paid from friday 31/10/2008.

This is contrary to this thread and my understanding, i thought only nationwide paid "backdated" interest.

Anyone clarify please?

It would be very unlikey that they would backdate interest to the date you submitted the request (meaning that there would be a few days where both ISA providers would be paying interest on the same balance). AFAIK, nobody does that. I calculated from this months interest payment that the interest on my transfer was paid from the 2nd day after it was applied to my account.

Frankly, I'm not overly impressed with Natwest so far. After having spoken to them yesterday about a transfer that seemed to be taking too long, it appears they lost the transfer form! That transfer would have taken my account up into the next interest tier, so I'm pretty annoyed I'm having to start the transfer process again from scratch. I will of course be making a complaint and asking that the interest be adjusted when the transfer finally arrives.

BristolVR

sweepnsoo wrote: »

Has anyone checked their online statement today for the interest credited yet?

Assume a rate of 5.2%

so I do the 365th root of 1.052 and power this to 20 (since my account was credited on October 11) and take away 1. This gives 0.002781566, which I multiply by my balance to work out the interest - which is remarkably close to the amount I've been paid.

The only explanation I can think of is the rate has been 7%, but interest has only accumulated from the cleared date, which I didn't think was the way they worked out their interest?

Hi sweepnsoo,

I too was concerned that my bonus 2% hadn't been credited, but I've now sussed the calculation, to the penny, for both my and my wife's new ISAs. It appears the bonus is included, but the number of days is decreased for what I can only presume is a clearing time. That's really annoying - between us we have lost about £80 in interest due to the sending and receiving banks having had the benefit of our money during the transfer process. :mad:

Anyway, regarding your interest calculation:

Take the *nominal* interest rate you are expecting (not the AER), -- call it 'r'. (E.g., if you're on the 7.32% AER, the nominal rate advertised by NatWest is 7.13%, ie 0.0713 -- see the rate tables on the website.)

Call your starting balance 'b'. (I'm assuming your balance didn't change before 31/10/2008.)

Say the number of interest-bearing days is 'd'.

Then your credited interest is b x r/365 x d.

Of course, you won't know exactly what 'd' is, but if you use a spreadsheet you should be able to fiddle with the 'd' value, always a whole number' to get an interest calculation that matches what you actually received. As I say, I did this and got it to the nearest penny, but you need to avoid rounding any intermediate calculations, I should think.

Hope that helps.

masonic

BristolVR wrote: »

(E.g., if you're on the 7.32% AER, the nominal rate advertised by NatWest is 7.13%, ie 0.0713 -- see the rate tables on the website.)

This is odd... I've just noticed the AER rates for the bonus interest quoted on the website do not tally with the gross rates. The standard rates table seems to be correct, though. If interest is paid monthly, then the monthly gross rate can be converted to AER by expressing it as a decimal multiplier and raising it to the twelfth power

e.g 5.13% Gross / 12 = 0.4275% -> 1.004275 ^ 12 -> 1.05252 = 5.25% AER

However, 7.13% Gross / 12 = 0.5942 -> 1.005942 ^ 12 -> 1.07367 NOT= 7.32% AER

BristolVR

masonic wrote: »

<snip>
However, 7.13% Gross / 12 = 0.5942 -> 1.005942 ^ 12 -> 1.07367 NOT= 7.32% AER

Interesting. However, I think the nominal rate is what they are contractually obliged to pay, and since the nominal rate seems to imply a *higher* AER than the AER that they quote, I won't be losing any sleep.

BTW, I see on another forum that Nat West will be cutting the rate by 0.5% from tomorrow. :eek:(Don't know how reliable that info is though).

rosepetal37

BristolVR wrote: »

Interesting. However, I think the nominal rate is what they are contractually obliged to pay, and since the nominal rate seems to imply a *higher* AER than the AER that they quote, I won't be losing any sleep.

BTW, I see on another forum that Nat West will be cutting the rate by 0.5% from tomorrow. :eek:(Don't know how reliable that info is though).

I guess this will happen. Britannia BS cut theirs on Friday too

rosepetal37

BristolVR wrote: »

Hi sweepnsoo,

I too was concerned that my bonus 2% hadn't been credited, but I've now sussed the calculation, to the penny, for both my and my wife's new ISAs. It appears the bonus is included, but the number of days is decreased for what I can only presume is a clearing time. That's really annoying - between us we have lost about £80 in interest due to the sending and receiving banks having had the benefit of our money during the transfer process. :mad:

Anyway, regarding your interest calculation:

Take the *nominal* interest rate you are expecting (not the AER), -- call it 'r'. (E.g., if you're on the 7.32% AER, the nominal rate advertised by NatWest is 7.13%, ie 0.0713 -- see the rate tables on the website.)

Call your starting balance 'b'. (I'm assuming your balance didn't change before 31/10/2008.)

Say the number of interest-bearing days is 'd'.

Then your credited interest is b x r/365 x d.

Of course, you won't know exactly what 'd' is, but if you use a spreadsheet you should be able to fiddle with the 'd' value, always a whole number' to get an interest calculation that matches what you actually received. As I say, I did this and got it to the nearest penny, but you need to avoid rounding any intermediate calculations, I should think.

Hope that helps.

Interesting thanks. Now I've looked further into this, this is what their Rates page says

How it's calculated - we apply the bonus from the date we receive your Cash ISA transfer form. However, the 12 month period starts when we receive the funds from your old Cash ISA provider. So you could get our market-leading rate for longer than 12 months.

though which adds another spanner into the works as our interest should be even higher (my form was in before October 1st so I should have a full month of bonus then). Mmm