natwest sorry

sjh101

Sorry to keep bang in on about this, I know theres threads all over the place but I'm just trying to work something out.....

OK firstly, the new charges, there is no actual interest charge for arranged overdrafts, the interest on top of other payments is only applied on unarranged overdrafts. That's my understanding from my email.

But say it were to have interest applied on top, have I worked out this scenario correctly?

If I'm overdrawn by £250 in an arranged overdraft Of about £2000 with an AER of 19.99.

My interest would be £49.75 which I would pay over the year. So dividing that by 12 gives me approx £4.15 which is the interest I'd be paying each month. So if I'm wrong in my earlier statement then my overall charges each month would be £6 a month charge plus £4.15 interest resulting in £10.15 a month? But my understanding is that I just pay the £6.

Thanks

innovate

Depends on what account you have.

Have you read this http://www.natwest.com/downloads/global_options/docs/nw_overdrafts_explained.pdf

YorkshireBoy

sjh101 wrote: »

Sorry to keep bang in on about this, I know theres threads all over the place

You've started three of them this weekend yourself...all asking the same thing!!

OK firstly, the new charges, there is no actual interest charge for arranged overdrafts, the interest on top of other payments is only applied on unarranged overdrafts. That's my understanding from my email.

It appears, from the replies to your other threads (that you don't appear to have read or acknowledged yet), that your understanding is wrong.

But say it were to have interest applied on top, have I worked out this scenario correctly?

For an EAR of 19.89%, you would incur debit interest each day at the rate of...

Closing balance x 18.28% / 365

So, your £250 will cost you 12p per day...plus the £6 monthly charge.

If your balance fluctuates, you'd need to do (up to) 31 separate calculations.


* EDIT: Interest is incurred at the 18.28% 'nominal annual rate' (ie non-compounded), not the 19.89% 'effective annual rate' (EAR) as you've done in your calculations.