Natwest e-ISA transfer question

mike5678

Hi there,

Can I confirm with someone more clued up than me if I've got the right end of the stick here and got my sums correct.

A new tax year and I'm looking at the best available rates for my money. Once I've added my 09'/10' £3.6k allowance I will have £21,217.88 (£17,617.88 that is currently in my Principality eISA account) to transfer.

I see the Natwest e-ISA offers 3.51% interest for a transfer of this amount.

So, 3.51% of £21,217.88 is £744.75, which is what I take it the total amount payable over 12 months would be, and therefore a sum of £62.06 paid monthly?

I also notice from their T&C's that they pay interest monthly? This is vital to me as I am expecting to withdraw this cash at some point this year for a house deposit, so don't want an annually paid account and not recieve the payment if I remove it.

From their T&C's:

"8. Calculation, charging
and application times for
fees and interest
Credit interest – interest we pay you
If you are due interest , we will pay the money into
your account on the following days.
Calculation periods Date interest is paid
to your account
01 Dec 08 – 04 Jan 09 05 January 2009
05 Jan 09 – 01 Feb 09 02 February 2009
02 Feb 09 – 01 Mar 09 02 March 2009
02 Mar 09 – 05 Apr 09 06 April 2009
06 Apr 09 – 04 May 09 05 May 2009
05 May 09 – 31 May 09 01 June 2009
01 Jun 09 – 05 Jul 09 06 July 2009"

and

T&C's
"Section 5: Interest we pay you
The paragraph which appears under the heading ‘Calculation and application of Interest’ in Section 5
of our Fees Leaflet has been replaced with the following:
“Interest is calculated on a daily basis and paid into your account once a month, usually the day
after we issue your statement. The exception to this is our Cash Account, where interest is paid
within the first eight days of each month.”"

Have I gone wrong anywhere or am I correct in all my points here?

Thanks for any help,

Mike

bristolleedsfan

mike5678 wrote: »

I see the Natwest e-ISA offers 3.51% interest for a transfer of this amount.

So, 3.51% of £21,217.88 is £744.75, which is what I take it the total amount payable over 12 months would be, and therefore a sum of £62.06 paid monthly?

I
Have I gone wrong anywhere or am I correct in all my points here?

Thanks for any help,

Mike

One thing worth considering is that the rate quoted is variable, the rate hasnt so far been reduced since the last 0.5% base rate decrease, April "may" see a further base rate decrease so best not to do sums so far in advance regarding interest you would hope to receive in the future. The immediate future for savers is not bright.

Rate : "Last updated on: 2 Feb 2009"

mike5678

bristolleedsfan wrote: »

One thing worth considering is that the rate quoted is variable, the rate hasnt so far been reduced since the last 0.5% base rate decrease, April "may" see a further base rate decrease so best not to do sums so far in advance regarding interest you would hope to receive in the future. The immediate future for savers is not bright.

If the interest rate was to remain the same, are my sums correct and I have got the right idea of how it works?

bristolleedsfan

mike5678 wrote: »

If the interest rate was to remain the same, are my sums correct and I have got the right idea of how it works?

Yip, Natwest were very efficient with dealing with transfer forms in my experience even with Nationwide BS being involved. :rotfl:( e-saver was considered fine to have accompanying the e-Isa)

Baldur

mike5678 wrote: »

If the interest rate was to remain the same, are my sums correct and I have got the right idea of how it works?

The AER rate of 3.51% assumes that the full balance remains in the account and the interest is calculated & paid annually - the gross rate (also variable) of 3.45% is likely to be more accurate if you intend to withdraw before the full year is up.

oldfella

interest is paid monthly at 3.45% - so the initial monthly amount will be closer to £61, increasing over the year to a total of £744