loyds advantage account interest.

The_Economist

Could anyone tell me how much the interest works out a month on £7000 in the vantage account at 4%.

blueberrypie

About £23/month gross.

Funkyfreddy

The_Economist wrote: »

Could anyone tell me how much the interest works out a month on £7000 in the vantage account at 4%.

Erm, £7000 x 4% = £280
£280/12 = £23.33 Gross or £18.66 Net

Interest is calculated daily and credited Net so the amount credited each calender month will be different depending on how many days between relevant dates.

FF

YorkshireBoy

The_Economist wrote: »

Could anyone tell me how much the interest works out a month on £7000 in the vantage account at 4%.

Perhaps it's better to explain how you can work it out for yourself?

The AER may be 4.0%, but the 3.93% gross p.a. rate is what you earn your interest at.

So, each month your £7K will earn:

£7,000 x 3.93% / 365 x n

where n = the number of days in the statement period (anywhere from 28 to 34 in my experience)

So, for example with 30 days:

£7,000 x 3.93% / 365 x 30 = £22.61 gross, ie before savings interest tax

If you pay tax then multiply the above figure by 0.8, so

£22.61 x 0.8 = £18.09 net

Obviously with £7K in there you'd want to shift the interest out each month (because the interest rate on >£7K balances is zero). Therefore, in practice you'll never earn 4.0% interest (in there anyway) as the interest will not compound, ie you won't be able to earn interest on interest.

The_Economist

Thanks everyone most helpfull!!!!!!