Halifax Childrens Regular Saver - can't work it out

milliemonster

I opened 2 of these accounts on 8th November last year and set up standing orders for £100 a month.

Now the T&C's of this account state that I had to deposit an amount up to a maximum of £100 a month for 12 months to qualify for the 10% interest to be applied. If the accounts were closed early (before 24th November, yesterday) then the interest would be applied at the childrens save4it rate instead.

So I set up my standing order for £100 a month into each account from 20th Nov last year, the 12th payment being 20th Oct. I called Halifax on 7th November to confirm that I had met the t&cs to get the full 10% interest and they confirmed I had.

So today, I went in to close the accounts as I now want to put the funds into a new account for the kids.

The payments I have made into these accounts are as follows:

8th Nov 08 - £1 to open
20th Nov 08 - 20th Oct 09 - £100 each month

this is for each account so, I was expecting there to be £1201 deposited in each account, plus the 10% interest applied yesterday £120.10 in each (have I got that right or would it have been compounded?) so I expected their balances to be £1321.10 each.

Bear in mind that exactly the same amount of money has gone in each account on exactly the same day for the full year.

The balances when I closed the accounts today were:

£1253.45 in my dd's account
£1237.73 in my sons account

can anyone explain this? I appreciate I may have got my interest calculations wrong but why are they different amounts????

rb10

milliemonster wrote: »

this is for each account so, I was expecting there to be £1201 deposited in each account, plus the 10% interest applied yesterday £120.10 in each (have I got that right or would it have been compounded?) so I expected their balances to be £1321.10 each.

No, the interest is calculated daily on the balance in the account. This means that for the first month, it's calculated on a balance of £100; on the second month, on a balance of £200; and so on.

A good way of approximating the interest that you can expect to receive is:

[interest rate]*6.5*[monthly deposit]

So in your case, this would be 0.1*6.5*100 = £65.

£1253.45 in my dd's account
£1237.73 in my sons account

It sounds like your dd's account has been taxed (£65 less 20% is £52). Did you register it for gross interest at the start of the year?

I have no idea why your sons account should have recieved such a smaller amount of interest; are the transactions on the Regular Saver statements identical? Or are the any differences in dates or amounts at all on there?

milliemonster

Thanks for replying.

Both accounts have been taxed. I don't remember anything about registering for gross interest?

I have never received statements for the regular saver accounts, only what has been applied to the save4it books when I went in this morning to close the account and the balances from the regular saver accounts detailed in my post that were transferred across yesterday.

But I do know for a fact that all the payments made to each account have been identical and on the same date every month???

rb10

It would have been simpler if you'd registered for gross interest when you opened the account, but it doesn't matter, you can still get it back easily.

To reclaim the tax, just get Halifax to phone you back, by putting your phone number in here (they'll have to transfer you to the Savings Accounts department). (You can phone them on 08457 26 36 46 if you prefer, but the callback's free). They will be able to register the two accounts for gross interest. Halifax will need to get the tax back from HMRC on your behalf, so it may take a few weeks to be credited to the account (depends on how quick HMRC are!).

Also, ask them what rate your son's account was getting for that year, and why his interest was so much lower. I can't see any reason why he should have got so little.

Your dd's interest is correct, taking into account that tax has been taken off.

milliemonster

I have phoned the Halifax regarding the discrepancy between the two balances and they tell me that my dd has had 10% interest but my son's was 7%, they don't know why but are looking into it and will write to me within 7-10 days.

I'll contact them again about getting the tax refund, thanks for the info, I never even thought about that when I opened it!