Halifax Childrens saving account

sunny123_2

Hi

I am it confused with Halifax I took out a childrens saing account with 10% interest where I was paying £100 per month assuming to get £120 in interest but ended up with half that ?? Just wondering if anyone else is a bit baffled with Halifax interest calculations during these credit crunch times..

Dustykitten

The first month you had £100, the second £200 etc it was only at the end of the year that you had the £1200 and thus you don't get 10% of £1200 it is worked out over the year (I expect daily or monthly) as the funds increase. HTH

rb10

To back up what Dustykitten has said, the interest is calculated daily on the closing balance.

This is how the interest accumulates throughout the year (although it's obviously not paid until maturity):

So for the 1st month, you had £100, earning you 1/12th (because this is just for one month) of 10% annual interest = £0.83
For the 2nd month, you had £200, again earning you a further 1/12th of 10% annual interest = £1.67
3rd month - £300 gives a further £2.50 interest
4th month - £400 gives £3.33
5th month - £500 gives £4.17
6th month - £600 gives £5.00
7th month - £700 gives £5.83
8th month - £800 gives £6.67
9th month - £900 gives £7.50
10th month - £1000 gives £8.33
11th month - £1100 gives £9.17
12th month - £1200 gives £10.00

Adding these all up gives £65.00. In working out the above I have rounded heavily, and also assumed that every month is the same length and that you paid in on exactly the same day each month, but, give or take a few pounds either way, your interest should be approx £65.

opinions4u

sunny123 wrote: »

Hi

I am it confused with Halifax I took out a childrens saing account with 10% interest where I was paying £100 per month assuming to get £120 in interest but ended up with half that ?? Just wondering if anyone else is a bit baffled with Halifax interest calculations during these credit crunch times..

As others have inferred, they can only pay you interest on the money while it is in the account. If you'd funded £1200 on day one, rather than £100 a month, then you'd be right to expect £120 interest. But that's not how it works.

If you were funding it from another savings account (or high interest bank account) remember that you would have been earning interest there as well, up to the point you moved it to the Children's Regular Saver.

So it is fair!