Egg savings interest

oldfella

Since there has been no misrepresentation as to the method, the issue is simply whether 5.93% compounded daily really equal '6.3% AER' - and it does so Egg are entitled to describe the rate as '6.3% AER'

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you misunderstand my complaint - the issue is they describe it as 6.3 % gross - as you rightly say, it is not 6.3% gross - if it was I would have received more interest. The AER is obviously correct.

rb10

Egg are claiming that the interest is compounded daily, and that the AER is equal to the gross rate. This is clearly a contradiction, as daily compounding means the AER cannot be the same as the gross rate.

I think Oldfella has quite a lot in his favour. Egg claim that they pay 6.3% gross, compounded daily, which is clearly higher than the actual amount that he's been paid, of 6.3% AER.

If you had an account that paid interest twice a year, claiming a gross rate of 6.3%, then you'd expect to get 6.4% AER. The same principle is true here, just that the compounding is more frequent.

I guess the thing that clinches it is whether either the gross rate or the AER advertised take precedence over the other. Seeing as they have advertised two different interest rates (one being 6.3% gross, and the other 6.3% AER), I'd expect that they should be paying the higher of the two.