How do I work out the net interest rate?

geek84

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

Basic rate taxpayer? Multiply the number by 0.8.

geek84

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

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

Thanks Nikel

soulsaver

Higher rate tax payer... multiply by 0.6