On what balance are current account interest rates calculated on?

Mattly_2

Apologies for what must be an oft asked question (I'm new here and not very money savvy!)....

The amount in a current account can fluctuate a lot during the course of a month, so on what total do they base the monthly interest rate calculation? Is it worked out daily? If I withdrew/deposited a large amount of money, for - say - 5 days, then put it back/took it out again, would it have a big impact on interest earned?

It affects when I will set up some forthcoming direct debits. (Also just interested anyway!)

Thanks,

Mattly

rb10

It will normally be calculated daily.

Just be aware that most of the higher-paying accounts have limits, where only balances of up to £x will earn interest; anything above that earns, say, 0.1%.

anamenottaken

And interest is not normally earned on funds immediately they are paid in. (There are exceptions.) If you paid in Monday and withdrew on Wednesday, the best you could hope for is that you would earn interest on Tuesday.