How do I work out the net interest rate?

geek84 · 26 February 2011 at 12:09PM

Hi Folks

On many occasions, I see interest rates for savings advertised at % gross per annum.

How do I calculate the net equivalent?

Thank You.

Nikel · 26 February 2011 at 12:11PM

Basic rate taxpayer? Multiply the number by 0.8.

geek84 · 26 February 2011 at 12:21PM

Hi Nikel

Thanks for your reply.

It's as easy as that, is it?

So, assume a savings rate is advertised at 4% gross, then it would be 3.2% net?

Thank You.

Nikel · 26 February 2011 at 12:22PM

Yeah. Check it out:
http://www.hsbc.co.uk/1/2/interest-rates/savings-investments

The columns for net is always 0.8 x gross.

geek84 · 26 February 2011 at 12:24PM

Thanks Nikel

soulsaver · 26 February 2011 at 5:07PM

Higher rate tax payer... multiply by 0.6

How do I work out the net interest rate?

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