how much interest will I lose?

addicted2shoes

Hi, please can someone help! I currently have £50,000 in a savings account, I need to withdraw £4,000 asap.
They have said that I will lose a months interest if i make a withdrawal.
How do I work out what that will be, they said they couldnt tell me incase they were 1p out???
They said interest rate is 3.25 net rate is 2.6.
You can probably tell I am useless with numbers!
Thanks in advance!

opinions4u

£4,000 at 3.25% = £130 / 12 months = £10.83 (assuming every month has the same number of days in it).

If they apply it as a penalty, it will be £10.83.

If they reduce the amount of interest that they pay instead, then they'll knock a further £2.17 off this figure for tax.

Double check that the interest loss only applies to the amount withdrawn though. If it applies to the whole balance you could be facing a penalty of £135.42!

oldfella

4000 x .0325 / 365 x 31 = £11.04, assuming its a month interest on the amount withdrawn

addicted2shoes

Thats great, thankyou for your help! At first I thought they wanted 2.6% of £50,000!:o

oldfella

they might - check the T&Cs

Old_Slaphead

addicted2shoes wrote: »

How do I work out what that will be, they said they couldnt tell me incase they were 1p out???

You could ask them whether the penalty is on the full balance or just the amount withdrawn - it's usually just the latter unless T&Cs indicate otherwise

Loughton_Monkey

Yes, I get a figure of about £108, on the assumption you pay tax.

Your gross interest rate is 3.25%, which is 2.6% net. So do nothing, and your £50K would have earned about £50000*2.6%/12, which is £108.

Of course if you withdraw (withdrew) £4K on the first of the month, then arguably you would only 'lose' interest on £46K, because you cannot possibly expect a month's interest on money the bank doesn't have. Withdraw it on the last day, and you've lost the whole £108.