cahoot pay interest on statement day

Stompa

Cahoot only appears to be 4.75% gross AER. How come people are still with Cahoot?

I think their savings account currently pays 4.85% AER. However, there are lots of folks who have older (now discontinued) accounts which are currently paying more than that. For example, my bonus savings account is 5.25%, though sadly the bonus period only has about a month left to run.

Stompa

Searcher2

I am a bit confused about the AER claims.

On the Cahoot website it says ... 4.85% A.E.R. ( 4.75% gross p.a.) for credit balances under £250,000.

FirstDirect claim 5.00% A.E.R (4.89% gross pa).

Natiowide say 4.65% A.E.R. / Gross pa %.

How can Nationwide's AER rate = Gross pa% rate but the other 2 do not???

Stompa

How can Nationwide's AER rate = Gross pa% rate but the other 2 do not???

I'd imagine it's because Nationwide pays the interest annually, whereas the other two pay interest monthly.

Stompa

Stompa

Out of curiousity I just tried checking the monthly interest theory.

If you apply 4.75% monthly (i.e. 4.75%/12 per month) to a sum of £1000 you get:

0 £1,000.00
1 £1,003.96
2 £1,007.93
3 £1,011.92
4 £1,015.93
5 £1,019.95
6 £1,023.99
7 £1,028.04
8 £1,032.11
9 £1,036.19
10 £1,040.30
11 £1,044.41
12 £1,048.55

so an AER of 4.855%

Similarly applying 4.89% (i.e. 4.89%/12 per month)monthly to a sum of £1000 you get:

0 £1,000.00
1 £1,004.08
2 £1,008.17
3 £1,012.27
4 £1,016.40
5 £1,020.54
6 £1,024.70
7 £1,028.88
8 £1,033.07
9 £1,037.28
10 £1,041.51
11 £1,045.75
12 £1,050.01

so an AER of 5.001%.

In reality I guess the interest will be applied according to calendar months so the figures will be very slightly different, but essentially it looks like this matches the rate values given.

Stompa