How do I calculate daily interest rates on savings?

daisythecat_2

Well I'm glad someone else is seeing things the way I am, you get to the point were you go over and over it, and wonder if your working it out wrong and maybe the Halifax are right!!
But now I feel stronger than ever that the Halifax have made an error in their calculations.
Thanks

YorkshireBoy

sloughflint wrote: »

From memory, the rates around the time would have been around the 6.5-6.6 AER mark so that tallies with your 5.19 net figure.

The quoted net rate is derived from the gross p.a. rate, not the AER. The AER is a notional rate for illustratration purposes, and obviously cannot be achieved on a 6 month fixed term.

I'd have expected this account to have been advertised as...

AER............Gross p.a..............Net
6.??%...........6.49%................5.19

OP, are these the figures for your fixed rate WebSaver?

sloughflint

YorkshireBoy wrote: »

The quoted net rate is derived from the gross p.a. rate, not the AER. The AER is a notional rate for illustratration purposes, and obviously cannot be achieved on a 6 month fixed term.

I'd have expected this account to have been advertised as...

AER............Gross p.a..............Net
6.68%...........6.49%................5.19

OP, are these the figures for your fixed rate WebSaver?

How did you get the 6.68% YB?

I checked my method to obtain AER with the current Halifax rates ( 3 month, 6 month and 9 month) and it seemed to work.....
Unnecessary as it turns out as I don't believe the 365th root method would work so AER not needed to be calculated from the gross pa.

sloughflint

Damn, this thread has got me going again now.To explain my thoughts on this AER that we don't need:

Current Halifax rates 3 mth 5.8AER or 5.68 gross..... 1.0142^4=1.058

6mth 6.15AER 6.06 gross ....1.0303^2= 1.0615

9 mth 6.05 AER 6.01 gross.....1.045075^(4/3)= 1.0605

daisythecat_2

YorkshireBoy wrote: »

The quoted net rate is derived from the gross p.a. rate, not the AER. The AER is a notional rate for illustratration purposes, and obviously cannot be achieved on a 6 month fixed term.

I'd have expected this account to have been advertised as...

AER............Gross p.a..............Net
6.68%...........6.49%................5.19

OP, are these the figures for your fixed rate WebSaver?

Don't know about the AER, but the Gross p.a and net are correct.

YorkshireBoy

sloughflint wrote: »

How did you get the 6.68% YB?

As you know I'm no mathematician.

5.19% net is 6.4875% (6.49% rounded), ie net x 1.25 = gross.

[strike]I then played around with the AER in this calculator...

http://www.stoozing.com/mon2yr.htm

...until I got 6.49% gross as the result.[/STRIKE]

Please ignore this nonsense!

sloughflint

YorkshireBoy wrote: »

As you know I'm no mathematician.

5.19% net is 6.4875% (6.49% rounded), ie net x 1.25 = gross.

I then played around with the AER in this calculator...

http://www.stoozing.com/mon2yr.htm

...until I got 6.49% gross as the result.

I'm disappointed,YB. I was hoping for something more precise but it doesn't matter as I am confident that AER is not required. It's the gross per annum that is needed and that was easy to obtain from 5.19%.

I even started playing around with the Icesave 6 mth rates ( maturity and monthly payment of interest) and that tallied with my calculations so
as you can see, Daisy, this has captured my attention. I hate it when problems get the better of me. I blame Richard.:mad:

I hope Halifax don't keep us in suspense for too long.

sloughflint

I don't think that calculator would work in this scenario, YB.....
It converts AER to monthly gross per annum but this account would have paid out on maturity hence my calculations.
That calculator probably does this:

1200*(1.0668^(1/12)-1)=6.4838% for monthly gross per annum accounts.

I've got to stop thinking about this now. I'd best leave while I'm happy with my calculations.

YorkshireBoy

sloughflint wrote: »

I don't think that calculator would work in this scenario, YB.....

Neither do I, now I think about it (but in my defence I did say I was no mathematician ).

However, since you seem to want something "more precise", here's the calculation you should be using...

http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=135&a=1575&artpage=10 (see example 6...but substitute 6 for 8 for the OP's situation)

Note the need for two separate calculations in this scenario.

esbo

Hmmm given that Richard thinks that it corresponds to 2 months interest at a higher rate (although they should have taken the tax off?) then I was thinking how they could have wangled it down to 2 months. I guess they could say the initial check(?) did not clear until May which would make it a partial month so no interest, so then she gets interest for June and July only, none for August because that is her penalty month and none for September because that thats a partial month.
Sounds pretty sick but I bet that is what they will say. I have a feeling I might get stung by something like that on my newly opened ISA, ie losing a whole months interest :mad:
If that's the case I might close it again :rotfl::rotfl::rotfl: