TSB online saver - interest calculation?

Dagobert

The minimum opening balance is £250. The account attracts 4.25% during the onus period and 4.00% thereafter.

Terms & Conditions

• we calculate interest on a daily basis on cleared credit balances.
• if your account has a balance below the Minimum Opening Balance, other than a balance of less than £1, it will earn interest at the fixed rates of 0.10% p.a. AER/Gross, 0.08% p.a. Net.

Question

As interest is calculated on a daily basis, I presume that means that on days with a balance

• >=£250 the higher interest rate is applied
• >=£1 and <£250 0.1% is applied
• <£1 0% is applied

Is this assumption correct?

grumbler

So, your question is what interest is paid on £0.99: 0%, 0.1% or 4.25%? Why is this so important for you?

P.S. My understanding is that

IF (Minimum Opening Balance > £0.99)AND(Current Balance < Minimum Opening Balance)
THEN Interest Rate = 0.1%
ELSE Interest Rate = 4.25%

Careful_ly

The interest on this account appears to be 4.5% for the first six months, dropping to 4% the 4.25% is the AER (annual equivalent rate) Your assumption is correct. HTH

Dagobert

grumbler wrote:

So, you question is what interest is paid on £0.99: 0%, 0.1% or 4.25%?

No. My question is whether I get 4.25% for every day on which I have a balance >£250.

Or do I need to keep a balance of >£250 in the account for the whole year in order to get 4.25%?

Careful_ly

For the first 6 months you get 4.5% interest for each day you have £250

For the next 6 months you get 4% interest for each day you have £250
You dont need to keep the £250 in there but the rate drops to .1% if you only have £249
Hope this answers your question

danield

That's right. Each day that the balance is less than £250, the low rate is applied. Each day that that the balance is £250+, the higher rate is applied.

I thought I'd add that when the 6months bonus has ended, you can close the account and open a new Online Saver and get the bonus rate again.

There are accounts with better interest rates, but I use this account because my Current Account is also with lloyds and transfers are instant. Without the bonus, though, I'd probably change it.