Interest Calculation Query

mt77

Hello,

I am hoping someone can help me with regards to my interest payment calculation on my ISA account? I feel I may have been underpaid interest, and I need assurance before having a lengthy telephone discussion with Santander.

I opened a Santander Direct ISA Issue 9 account on 21 April 2012, paying a rate of 3.3% until 21 April 2013. However, my ISA transfer from Natwest didn't occur until 14 May 2012. I had already fully subscribed my ISA with Natwest that year (on 6 April). The balance that was transferred over (£26,334.60) reached my Santander account on 15 May.

I have made no withdrawals at all this year or the last year, and as I mentioned above, I couldn't deposit any more either (not until 6 April 2013).

I was paid interest in March of £700.00 (taking my balance to: £27,034.60). I fully subscribed again at the start of this tax year (transferred £5760 on 6 April, balance = £32,794.60).

I decided to leave Santander this year because of their interest rates dropping and decided to transfer out before 21 April. I managed to do so successfully, as I have now received a confirmation letter from Santander dated 17 April 2013. Though I have now realized that I have only been paid an additional £120.61 interest. Transfer balance of: £32,915.21, total interest for year: £820.61.

This interest payment seems quite low, compared to what I had calculated roughly - £26,334.60/100x3.3% = £869.04. Considering I had an interest payment in early March, and I fully subscribed again on 6 April, I thought my total interest payment should have at least been around £870.

Can someone advise if the interest calculations from Santander are correct, or whether I have a case and should take this up with them? I don't mind being out by £10 or £20, but anything more is questionable.

Thanks

Regards

Manish

Sensory

I'm going to make a few assumptions here:

• Natwest credited interest immediately before the transfer to Santander.
• Interest was paid on 2nd March 2013.
• The transfer out from Santander was completed on 17th April 2013.

I have not applied any rounding to the following calculations; I've simply plugged everything into a spreadsheet (meaning data beyond two decimal places is factored in, but not shown).

Balance | Interest per day (3.3% / 365) | No. of Days = Total Interest

£26,334.60 | £2.38 | 291 = £692.85
£27,034.60 | £2.44 | 35 = £85.55
£32,794.60 | £2.96 | 11 = £32.61
Total: £811.02

291 days from 15th May to 2nd March.
35 days from 2nd March to 6th April.
11 days from 6th April to 17th April.

CLAPTON

well from 14th may 12 to 21 April 2013 is about 342 days

so 26,334 x 3.3% x 342/365 = £814
plus 5640 x 3.30% x 15/365 = £7.8

so approximately expect about £822

mt77

Many thanks for your prompt responses. Silly me assumed I would be getting interest from the point of opening my account, rather than the point of transfer. At least its saved me a telephone call to Santander.

Natwest did pay me interest up to the point of transfer, so not much lost there. If only I had the option of transferring out exactly on 21 April 2013, I would have gained that little bit more at a higher rate. Ah well...

Thanks guys.

Regards

Manish