How do I calculate daily interest rates on savings?

Lokolo

All these numbers make me sad

esbo

esbo wrote: »

(snip)
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:

Update - Actually I just checked and they have paid me £15.67 interest which is more than a months interest as I calculated it (£15.57) on £3,600 and the money had only been in since the 1 Sept!! Not even a full month!! So well done HSBC!! :T

That does makes the OP's bank look even worse though!

[edit] actually I used the wrong rate a full month is £18.75 at 6.08%, I used 5.19% originally.

sloughflint

YorkshireBoy wrote: »

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.

I applied those formulae and got....wait for it......6.5927%

sloughflint wrote: »

Unless Daisy corrects us, if 5.19% is the given net rate based on interest being paid at maturity of a 6 month term, I think that would produce an AER of 6.5927%.

but goodness knows why the two stage formula when
( 1 + 0.064875/2)^2-1=0.065927 seems to give the same and the principle works for 3 and 9 month terms too. May have a ponder about this some other time if I get another nerdy moment even though AER irrelevant in these cases.

To all the confused people, lokolo was spot on in the very first place. No fancy sums required at all involving AERs or roots ( 365ths or other).

esbo

Oh I think I forgot to say that it was HBOS who were giving me incoorrect figures for my mortgage account, that as I though is the same bank as the OP.
They don't seem to very good with numbers they have a tendancy to make mistakes which always work in their favour, obviously I am not saying they are run by criminals

esbo

Whatever the case the lesson is don't bank with HBOS, it was obvipus they were run by criminals from the Farepak case.

Richard_Cocks

For a 6 month term that pays an AER of 6.5% the 6 month gross would be 6.3977%

By daily rate I meant the compounding rate. Here I guess that it would be more appropriate to take the monthly coumpounding rate and divide by 30.

sloughflint

I'm not sure if you are on a windup or not.

Richard_Cocks wrote: »

For a 6 month term that pays an AER of 6.5% the 6 month gross would be 6.3977%

By daily rate I meant the compounding rate. Here I guess that it would be more appropriate to take the monthly coumpounding rate and divide by 30.

You certainly appear to have a reasonable grasp of maths since an AER of 6.5% does indeed equate to a gross per annum rate of 6.3977% for a six month term paying interest at the end of the term.

However what on earth has this got to do with this thread?:mad:


OP has told us that the net rate was 5.19%
therefore the gross rate per annum is 6.4875% from which a daily rate can be obtained very simply.

It really is no more complicated than this.

If you are not on a windup then perhaps you are confused between AER and gpa?

That formula you originally used would only have been viable if interest was paid and compounded on a daily basis but it isn't. It is only calculated on a daily basis and paid on maturity.

Secondly, that formula would have required an AER which is why I went to such effort last week trying to calculate it ( 6.5927%) from the information given to us by OP so that I could apply your formula.

You are making things sound far more complicated than they are I'm afraid, and people on this forum are confused enough with interest calculations as it is.

Lokolo had already provided the necessary information for the OP.

esbo

sloughflint wrote: »

OP has told us that the net rate was 5.19%
therefore the gross rate per annum is 6.4875% from which a daily rate can be obtained very simply.

No it can't it can't be obtained at all frm the info in the OP because there is not enough
info there to determine it unless you make assumption, yea it's easy to make a guess just as it is easy to guess the winner of the Grand National, guessing the right one is the tricky bit.

sloughflint

esbo wrote: »

No it can't it can't be obtained at all frm the info in the OP because there is not enough
info there to determine it unless you make assumption, yea it's easy to make a guess just as it is easy to guess the winner of the Grand National, guessing the right one is the tricky bit.

What are you on about esbo?

sloughflint

Gone quiet esbo? And there was me thinking you were top of the class:rolleyes: