Nationwide FlexDirect C/A - 5% on 2K5 no fee

purplestar133

I'm here to annoy you all!

Can anyone give me the calculation I should use to work out what interest I should have earned on the Flex Direct account this month? I have tried, but seem to be missing something.

I funded it with the £1000 by moving smaller amounts in and and out. I ended up with a balance of £250 for 2 days, then a balance of £200 for 17 days. I have earned 55p interest and had 11p debited (presume this is tax).

If someone can give me the formula to use to work out if this interest is correct I would be grateful!

This may be simple to you, but for some reason, I can't grasp how to do it.

YorkshireBoy

alexlv wrote: »

Are you saying that if you had £1 OD in Nationwide FD it would still be better to keep money in 2.8% account?

I'd covered that base in my earlier post, but then deleted it!

Obviously the benefit has to outweigh the 'cost', so the quesiton is how much would I do it for?...£10...£20...£30...?

I thought £42.60 was worth it. Others may not. Some may do it for a lot less.

YorkshireBoy

purplestar133 wrote: »

If someone can give me the formula to use to work out if this interest is correct I would be grateful!

Each day you earn interest at...

Closing balance x 4.89% / 365

Sum up the 30 days (for April) and then multiply by 0.8 if you're a tax payer.


EDIT: And yes, 11p is 20% of 55p.

alexlv

YorkshireBoy wrote: »

I'd covered that base in my earlier post, but then deleted it!

Obviously the benefit has to outweigh the 'cost', so the quesiton is how much would I do it for?...£10...£20...£30...?

I thought £42.60 was worth it. Others may not. Some may do it for a lot less.

Does size of OD matter or not? If as you said previously it doesn't then could you please answer my question about £1 OD.

In your case (4.89% vs 2.8%) if you had OD of £1866.07 or less in each of your FD you would be better of to keep money in Nationwide. If more then in Halifax.


2500*4.89% = (2500+OD)*2.8%

Size of OD DOES matter.

alexlv

YorkshireBoy wrote: »

and 2.8 will always be bigger than 2.09 (see above)...irrespective of the sum involved.

Not true, if we apply these percentages to different amounts.

purplestar133

YorkshireBoy wrote: »

Each day you earn interest at...

Closing balance x 4.89% / 365

Sum up the 30 days (for April) and then multiply by 0.8 if you're a tax payer.


EDIT: And yes, 11p is 20% of 55p.

Thank you very much.

I calculated I should get 42p.

I actually got 44p after tax.

I must be doing something very simple wrong. The money wasn't in there a full month, but I thought I had accounted for that by adding up how many days it was in there (2 @ £250 and 17 @ £200). I must have miscounted somewhere.

Why do you multiply by 0.8%? Is that for the tax? I thought that was already accounted for by multiplying the closing balance by 4.89/365?

I know the interest I am talking about is only pennies, I am just checking to make sure I am fulfilling the t&cs of the account and earning the 5% gross rate. I'm using this account to save this year's ISA allowance and then will stick in an ISA before the end of the tax year.

I'm the 'clever' one of the family you know...:o:(

YorkshireBoy

purplestar133 wrote: »

Why do you multiply by 0.8%? Is that for the tax? I thought that was already accounted for by multiplying the closing balance by 4.89/365?

4.89% is the gross p.a. rate (the 'a' stands for annum, ie year). 365 is the number of days in the year.

All that's doing is calculating the daily interest figure...gross before tax deducted. Multiplying by 0.8 deducts the 20% savings interest tax.

I am just checking to make sure I am fulfilling the t&cs of the account and earning the 5% gross rate.

You are.

I'm using this account to save this year's ISA allowance and then will stick in an ISA before the end of the tax year.

Smart move!

YorkshireBoy

alexlv wrote: »

2500*4.89% = (2500+OD)*2.8%

Thanks for that. I can see where you're coming from now.

pqrdef

That 4.89% is a little ungenerous. It's not like the creamed-off interest isn't doing anything. You had it out of there and into an interest-bearing account at 6.30 this morning. Or you would have had if you weren't stoozing the overdraft instead.

They would only give me £1250 OD, so I had to drop the stooze plan and settle for the interest.

bubbles0169

anybody good with tax?
ive been taxed 20% on my NFD but my earnings come under the tax allowance with over £1400 spare and going on the 68p interest i earned this month it wouldnt take it over the allowance so why charge me?