Natwest ISA interest

oldfella

just finished my first full month on the Cash ISA 2% bonus account - it seems they pay interest on the last business day of the month, in this case its the 28th November, and interest seems to be paid up to the 28th rather than the end of the month.

is this the way Natwest does it ?

thanks .. Mike

lisyloo

I would check it if I were you.
Mine looks more like I've been paid the 1.76% rate rather than 2%.

Approximate calcuation should be

capital * interest rate/100 / 366 * number of days interest

Note: I don't know whether they use 366 or 365 as the number of days in the year as it's a leap year.
Note2: I don't know whether they include the first and last day e.g. whether they include 27th or 28th.

Either way mine does not look right, so I will be calling them.

lisyloo

Correction, I think mine is correct, but you need to use the GROSS rate in the calculations and not the AER.
The AER is acheived by the compounding i.e. getting interet on your monthly interest.

masonic

Assuming I've been paid interest for 28 days, I've been paid at a gross rate of 6.27% (assuming 366 day year). That's the rate for the wrong interest tier and wrong bonus amount.

Edit: No, my interest is correct for being paid to the 28th. I forgot to calculate interest for 1st-2nd November at the previous rate.

YorkshireBoy

My transfer in was posted to my account on Tues 11/11/08 (cheque left A&L on Tues 4/11/08 and arrived at NatWest on Fri 7/11/08), yet I've only received interest for 15 days (assuming 6.51% gross), ie Fri 14th to Fri 28th inclusive.

Assuming cheques work on the 2-4-6 principle I should have been accruing interest from Tues 11/11/08, ie a total of 18 days, shouldn't I?

masonic

YorkshireBoy wrote: »

Assuming cheques work on the 2-4-6 principle I should have been accruing interest from Tues 11/11/08, ie a total of 18 days, shouldn't I?

2-4-6 suggests you should start receiving interest 2 days after the cheque is applied to your account, doesn't it? That would mean you should have earned interest from Thurs 13th to Fri 28th, which still isn't what you appear to have received.

YorkshireBoy

masonic wrote: »

2-4-6 suggests you should start receiving interest 2 days after the cheque is applied to your account, doesn't it?

Thanks for your reply masonic.

I would class day 0 as Friday, ie the day they received the cheque. After all, if I'd gone to branch with a cheque myself on Friday then I'd expect that to be day 0.

Since the money 'changed hands' on Tuesday, ie day (0 +) 2, I would expect, at the very minimum, to be earning interest from that date.

I have a 'concern' registered with them already because I'd been told they wouldn't pay interest from either the day after the funds left my previous provider or the date they received the transfer cheque...as my last 3 providers* did.

That would mean you should have earned interest from Thurs 13th to Fri 28th, which still isn't what you appear to have received.

I'll be calling them today. Looking forward to their answer (which I'm unlikely to get today of course!).



* Halifax, YBS, and A&L.

lisyloo

My husband has received 24 days interest (posted 3rd) and I have received 16 days interest (posted 10th).

So no clearance times for us (although his seems to include one extra day than mine).

YorkshireBoy

Thanks lisyloo,

You're in 'synch' with me, ie funds start to accrue interest on the 3rd day following posting to the account (looks like Hubby got lucky!).

I'm not happy though, because that's Day 0 + 5 in my case. At the very least I'm 3 days interest short...and more if I can get them to backdate the date of deposit for interest earning purposes (as other providers do).

Registered another 'concern' this morning, so we'll see what happens.

bluebell_lily

For your information, these are the rates for September and some point in October 2008 :

(assuming you made the transfer before a certain date in November 2008) :

If you invest: Gross inc Bonus AER inc Bonus
£27,000+ 7.13% 7.32%
£18,000-£26,999 6.98% 7.16%
£9,000-£17,999 6.70% 6.87%
£1-£8,999 6.51% 6.67%

I'm sure they dropped it by 0.5% sometime, but don't have the exact figures to hand. Last time I checked during the middle of October 2008, the rates were still advertised as above, so if an exact date of the drop in rates could be provided, this may help in providing an accurate estimate of the interest earned.

bluebell_lily

Natwest ISA rates for those with 2% bonus:

Last updated on: 1 Dec 2008. Including 2% bonus


BalanceAER
(variable)Gross RateNet Rate£27,000+5.33%5.20%N/A£18,000 - £26,9995.18%5.06%N/A£9,000 - £17,9994.87%4.76%N/A£1 - £8,9994.66%4.56%N/A

Interest paid monthly.
For customers who applied to transfer from 18 September 2008 until 9 November 2008.