How to work out interest on ISA

stboard

Hi All,

I think Santander have mis-calculated previous year interest incorrect and was wondering how I would work out the interest I should have got on for example 19K at 2.75% AER.

I think its worked out like

19K x 2.75/100 = interest gained but it doesn't match what Santander have paid.

Thanks All.

Steve

Baldur

stboard wrote: »

I think Santander have mis-calculated previous year interest incorrect and was wondering how I would work out the interest I should have got on for example 19K at 2.75% AER.

I think its worked out like

19K x 2.75/100 = interest gained but it doesn't match what Santander have paid.

If the balance has been £19,000 for a full year, then it should give £522.50 in interest (balance * 0.0275 = interest)

stboard

Baldur wrote: »

If the balance has been £19,000 for a full year, then it should give £522.50 in interest (balance * 0.0275 = interest)

Ah, so its from time of opening account which would have been June, this time I'm looking at Halifax ISA Promise which clears up what you say about a full year.

Thanks Baldur.

Baldur

stboard wrote: »

Ah, so its from time of opening account which would have been June, this time I'm looking at Halifax ISA Promise which clears up what you say about a full year.

For anything less than a full year, you need to amend the calculation:

((balance * 0.0275)/365)*number of days = interest)

So if the full balance was from 1/6/2010 to 30/4/2011, for example, it would be ((19000*0.0275)/365)*333=£476.69

stboard

Baldur wrote: »

For anything less than a full year, you need to amend the calculation:

((balance * 0.0275)/365)*number of days = interest)

So if the full balance was from 1/6/2010 to 30/4/2011, for example, it would be ((19000*0.0275)/365)*333=£476.69

Thanks again for the formula Baldur I understand fully now, something which last year the banks never (or I didn't read) how the interest is calculated.