Incorrect ISA interest.

Cardew

Trying_to_be_good wrote: »

I have sent a secure message to Nationwide about exactly this - I have a 2-year fixed term ISA paying 6.15% (yay!), started in Dec 07. It pays interest on 31 March, annually, and on the maturity date.

So, original deposit £14,338.23
Interest to 31 Mar 08 £260.32 (didn't bother to check this - new balance £14,598.55)
Interest to 31 Mar 09 £895.93 - should be £897.81 by my calculator

Only pennies different, but MY pennies. I was advised ISA replies were taking approximately 14 working days, on 1 April. I make it 15 working days since then, so will let you know when they reply.

Interesting.

My ISA balance on 31 Mar 08 was £28,287.00 now according to my calculator the interest on that sum at 6.15% is £1739.65. I have been credited with £1,736.06 - so a difference of £3.59 in NW's favour.

Your difference on a balance just over half my total is £1.88.

So again using my calculator it would appear that we have been 'short changed' in exactly the same way i.e. paid 6.137%

rb10

I expect that they will be rounding - or possibly truncating - the daily interest rate or amount calculations. It would be interesting to know exactly where they round or truncate though.

BruceyBonus

This old version of the Nationwide Wikipedia page seems to explain how NW calculate the interest, but I still can't reach the figures NW actually credit
http://en.wikipedia.org/w/index.php?title=Nationwide_Building_Society&oldid=206557501#Interest_Calculations

BruceyBonus

Cardew wrote: »

Interesting.

My ISA balance on 31 Mar 08 was £28,287.00 now according to my calculator the interest on that sum at 6.15% is £1739.65. I have been credited with £1,736.06 - so a difference of £3.59 in NW's favour.

Your difference on a balance just over half my total is £1.88.

So again using my calculator it would appear that we have been 'short changed' in exactly the same way i.e. paid 6.137%

I managed to get to £1736.06 interest, based on being paid for 364.247 days of a 365 day year.

rb10

BruceyBonus wrote: »

This old version of the Nationwide Wikipedia page seems to explain how NW calculate the interest, but I still can't reach the figures NW actually credit
http://en.wikipedia.org/w/index.php?title=Nationwide_Building_Society&oldid=206557501#Interest_Calculations

A very interesting link ... but it doesn't really help that much. I can get it fairly close to the actual figure if you assume that every day you receive about 1/365.75th of the annual rate, and then truncate the annual rate & daily amount accrued. We want whoever wrote that wikipedia page to come on here...!

Cardew

I and my family have had some 1 year fixed rate bonds(not ISA) with NW and all of them have paid exactly the correct amount of interest when they matured - to within 1p.

Trying_to_be_good

Cardew wrote: »

I and my family have had some 1 year fixed rate bonds(not ISA) with NW and all of them have paid exactly the correct amount of interest when they matured - to within 1p.

I have a £1,000 1-year e-bond maturing tomorrow, at a rate of 6.6% gross, 5.28% net. By my reckoning, that should be £52.80 net interest payable tomorrow. I'll let you know...

savetilibleed

Northern Rock have downloadable leaflet "Your interest...and how we work it out", if that is any help to anyone.

Cardew

BruceyBonus wrote: »

I managed to get to £1736.06 interest, based on being paid for 364.247 days of a 365 day year.

Thanks, however we really shouldn't have to work out how they have paid less interest than advertised.

£10000 invested for exactly one year at 6% should pay exactly £600 and we shouldn't have to be finding reasons why they have only paid £598!!

Trying_to_be_good

Trying_to_be_good wrote: »

I have a £1,000 1-year e-bond maturing tomorrow, at a rate of 6.6% gross, 5.28% net. By my reckoning, that should be £52.80 net interest payable tomorrow. I'll let you know...

Looks like more Nationwide tricks - they've credited £65.87 gross, £52.70 net. Where's my other 13p gross, 10p net?! That's 364.72 days' interest, not 365.