Is savings interest calculated on the balance?

Bravehearted_2

Or something else?

Thanks

InsertWittyName

I'm sorry, but there's nothing else it could actually be calculated on?

What were you thinking it was calculated on?

It's based on balance and the time period held (so regular savers of say £50 per month would get a reduced interest payment as opposed to someone who invested the same amount (12 * £50) of money upfront).

Bravehearted_2

I've heard its based on the period held not the current balance which is still confusing.

If interest is usually paid on day x, and I transfer a wad of cash the day before, do I get more in interest or am I wasting my time?

opinions4u

Bravehearted wrote: »

I've heard its based on the period held not the current balance which is still confusing.

Calculated daily based on the balance at the end of each day. Occasionally you will find a provider that accepts deposits on a weekend but doesn't start paying interest until the following working day.

If interest is usually paid on day x, and I transfer a wad of cash the day before, do I get more in interest or am I wasting my time?

Not being funny, but what do you think? Leave £1 in for a year. Transfer £10,000 on day 364. Do you really think they're going to pay you £300 for that?

Open 365 accounts with £1, each with a different interest payment date. Move the £10k into each of them at the last minute. You could bag over £100,000 a year in interest ...

I know banks can be stupid, but they're not that stupid.

[Deleted User]

Hi,

roughly, if you put £100 @ 5% apr and leave it for a year, you will get £105, if you leave it for a month, you will get £100.42 and only a day, £100.01, oh, and if you are a basic rate tax payer interest will be taxed at 20%.

evenasus

[Deleted User] wrote:

Hi,

roughly, if you put £100 @ 5% apr and leave it for a year, you will get £105, if you leave it for a month, you will get £100.42 and only a day, £100.01, oh, and if you are a basic rate tax payer interest will be taxed at 20%.

This is the total balance they would end up with.

I understand what you said - but some people (and it's surprising how many) might think you mean actual interest received.

[Deleted User]

Hi,

thanks, yes, I get your point.

£100 @ 5% apr gets:

1 year £5 interest,

1 month 0.42p interest,

1 day 0.01p.

Hope that's a bit clearer.

Joe_Bloggs

All of the above is true however there are some quirky savings accounts out there. My vote goes to.........................this.

Nationwide's regular saver account requires you to have increased your previous savings balance by the 1st of each month to qualify for daily interest in the past month on the money in the account. If you can increase the balance by £500 to £1000 then you get the equivalent of 2.5% per annum on the account for the daily balance for the past month.

If you increase the balance by £200 to £499 the rate drops to 1.85% on the total etc..If the end monthly balance remains static or falls then you get 0% per annum for the month.
J_B.

oldvicar

Joe_Bloggs wrote: »

All of the above is true however there are some quirky savings accounts out there. My vote goes to.........................this.

Nationwide's regular saver account requires you to have increased your previous savings balance by the 1st of each month to qualify for daily interest in the past month on the money in the account. If you can increase the balance by £500 to £1000 then you get the equivalent of 2.5% per annum on the account for the daily balance for the past month.

If you increase the balance by £200 to £499 the rate drops to 1.85% on the total etc..If the end monthly balance remains static or falls then you get 0% per annum for the month.
J_B.

I've got one of those!

In the first instance, it offered a good rate of interest, and for a regular saver a decent amount could be tucked away each month, and potentially forever not just for e.g. 12 months, thereby building up a sizeable amount. But interest rates aren't that good now.

Then, when getting the most from a FlexAccount meant funding this with a minimum £750 per month, I did this and set up to transfer to the Regular Saver, and emptied it every now and again (typically back to the external account funding the Flexaccount) on the 1st of a month.

Now I actually use my Flexaccount to spend the required minimum the Reglar Saver serves neither of the above purposes. But I keep it, with no money in it, for the Cash Card - if I need to withdraw more than max daily limit from a cash machine I can pop some money into the Regular Saver and immediately withdraw it. Effectively it doubles my daily cash machine withdrawal limit.



Other 'quirky' accounts come from such as Punjab National Bank - where the anticipated interest is all paid (and therefore is taxable) up front. If you don' keep to the full term there is some clawback though. But I don't have one of these !