Interest not paid

book12

I have an e-savings account. The payment frequency of interest is monthly (first day of the month). The account was opened in the middle of last month. The interest rate for that account is 1.26% AER (1.25% gross p.a.)

According the T & C's, the interest should be paid monthly on the first day of the month, but it hasn't.

I have another savings account with the same bank, with the interest paid monthly (first day of the month). The interest was paid for that account. It was 1p. The interest rate was 2.58% AER (2.55% gross p.a.).

It's strange that one account receives interest, and the other doesn't.

rb10

What was the balance of the account from when you opened it in mid-September, until 30th September?

book12

Don't know exactly, but I know it's over £10.

By the way, minimum deposit is £1.

rb10

So if it was £10, then you'd get:

£10.00*0.0125/24 (to give approx 2 weeks) * 0.8 (assuming you're a taxpayer?) = £0.0042, which rounds to £0.00.

book12

rb10 wrote: »

So if it was £10, then you'd get:

£10.00*0.0125/24 (to give approx 2 weeks) * 0.8 (assuming you're a taxpayer?) = £0.0042, which rounds to £0.00.

No wonder then.

What's the '24'? What's the 0.8?

All I know is the 0.0125 is the 1.25% gross p.a.

alanq

I think that the 24 was meant to be 26 (2 weeks being 1/26th of a year). So the correct calculation would approximate even more closely to zero.

Assuming that you are not registered to receive gross interest, 20% tax is deducted leaving you with a net amount of 80% (i.e. 0.8) of the quoted gross interest rate.

rb10

alanq wrote: »

I think that the 24 was meant to be 26 (2 weeks being 1/26th of a year). So the correct calculation would approximate even more closely to zero.

It was clearly past my bedtime when I did that. Thank you, it was supposed to be 26.