MSE News: Banks pledge to provide data that may help you find your perfect account

matttye

JimmyTheWig wrote: »

Ok, lets take a simple example.
£3000 salary comes in at the start of the month.
£3000 bills go out half way through the month.
£1500 remains in the account as a minimum.

So half the time there is £1500 in the account and half the time there is £4500 in the account.
Santander asks "Your balance: how much is usually in your account?". What should I put in? An average of £3000, I presume.
They tell me I'll get £89 interest. (I don't know why it doesn't say £90.)

But that's not the case. I'll actually only get £72.50 as half the time I'll only be getting 1% interest not the 3% that my average balance suggests.

And this is, obviously, a simple example. It was easy for me to calculate the real interest figure. But for most people bills don't come out of the account all in one go. So how would you calculate it?

Not how I would do it.

£4,500 * 0.024/12 / 2 +
£1,500 * 0.008/12 / 2

(roughly)