Santander - Interest out by 5p

opinions4u

There can be oddities in the calculation:

- like uncleared funds not paying interest
- strange rounding by the provider
- when interest accrues for deposits made on non-bank working days
- do they calculate interest on the balance at the start of the day or the end of the day
-when does the leap year apply for the purpose of interest calculation (you would assume 1st jan to 31st Dec but this isn't always the case).

For what it's worth, the contractual rate of interest in law is the gross rate (not the AER). If they are advertising 4.89% gross but paying something less than this due to rounding it's almost certainly a breach of contract that they should put right. It's just not something worth kicking up a fuss over in most cases!

I've not bothered checking it. Because I don't know the answers as to how Santander actually treat the items mentioned above.

GeorgeHowell

There have been cases of criminals diverting very small amounts from large numbers of personal accounts on the assumption that it will not get noticed, and amassing vast amounts in the process.

CKhalvashi

GeorgeHowell wrote: »

There have been cases of criminals diverting very small amounts from large numbers of personal accounts on the assumption that it will not get noticed, and amassing vast amounts in the process.

The only ‘criminals’ that it would possibly be are Santander.

CK

skitskut

Are you sure they haven't got a certain Gus Gorman working for 'em?

withnell

Santander interest is calculated from a month from when you open the account, not the statement dates (for me the period ends 4 days before the statement date)

Something else to be aware of is that you need to credit the £1000 each month within this same period, not the statement dates (if you check the "Interest and fees" leaflet it's detailed in there)

hermante

mgarl10024 wrote: »

Hi,

I know this is a little sad, but once again, I just can't get my interest to add up. I'm quite happy to believe that it's me, and I just want to get it right in my head because I'm trying to learn, not because I am losing sleep over 5p. :-)

I can't get mine to add up correctly either (since December), but sometimes it pays more and sometimes it pays less.

From before Dec I was using 1.0306/365 per day and it added up perfectly.

oldvicar

The 5.00% AER is achieved by paying, as per the link quoted by OP, 4.89% Gross pa COMPOUNDED MONTHLY.

So instead of dividing 4.89% by the 366 (or 365 or 365.25 etc.) days in a year to calculate:

0.0488894854038 (gross annual rate) / 366 days x 1014.68 x 1 day = £0.1355387515
0.0488894854038 (gross annual rate) / 366 days x 2500 x 29 days = £9.68439259973

Try instead:

0.0488894854038 (gross annual rate) / 12 (months in year) / 31 (days in January) x 1014.68 x 1 day =
0.0488894854038 (gross annual rate) / 12 (months in year) / 31 (days in January) x 2500.00 x 8 days =
0.0488894854038 (gross annual rate) / 12 (months in year) / 29 (days in leap February) x 2500.00 x 20 days =

I've assumed that the dates are not inclusive and have deducted a day's interest (Feb 21st) in the above example.

The sums get closer to what Santander have paid, but frustratingly no matter how I try rounding are still 1p out !

No idea if this is what they do, just trying to find a way to make the figures match.

Eco_Miser

CKhalvashi wrote: »

The only ‘criminals’ that it would possibly be are Santander.

Or someone working at Santander. In the classic case, which happened decades ago in the USA, a programmer diverted all the fractions of a cent from rounding interest payments, into an account controlled by him. All the check figures still added up right.

I think 5p is too big to go un-noticed.

Money_Saving_Dude

GeorgeHowell wrote: »

There have been cases of criminals diverting very small amounts from large numbers of personal accounts on the assumption that it will not get noticed, and amassing vast amounts in the process.

Ah yes, reminds me of The Cuckoo's Egg which I read years ago. Good read, too as I remember.

The_Batman

At least with your bank you're not 1p out.. It's less money, but it's so frustrating that it's so close! lolol!!