Interest earned.

makey1976

Hi looking for info
I have opened a few currents account recently
2x bos £5000 each 3%
2x tsb £2000 each 5%
sat 123 £19500 3%
nationwide £2500 5%
tesco £3000 3%
total £39000
Can anyone tell me how much interest i should earn on each account and do they pay it monthly or yearly.
Thanks

patientperson

Divide the capital by 100 and multiply the result by the interest rate giving a full year's interest. I expect it will be yearly as monthly interest tends to be a slightly lower interest rate.

Ed-1

makey1976 wrote: »

Hi looking for info
I have opened a few currents account recently
2x bos £5000 each 3%
2x tsb £2000 each 5%
sat 123 £19500 3%
nationwide £2500 5%
tesco £3000 3%
total £39000
Can anyone tell me how much interest i should earn on each account and do they pay it monthly or yearly.
Thanks

In all those current accounts they pay interest monthly but the rates are the AERs (i.e. the annual equivalent rates). So the actual monthly rates are lower to account for compounding of interest each month (note that as the accounts all have a maximum limit for earning interest, it is not possible to achieve those AERs on the maximum limits by keeping money solely in those accounts; i.e. you need to 'skim off' the interest each month and place it in another interest-paying account to earn interest on the interest).

YorkshireBoy

You won't be able to earn those AER rates on any of them except Santander because you've maxed them out.

So you'll only make the gross p.a. rate.

Taking TSB as an example, grab yourself a calculator (Windows has one built in!) and type:

2
0
0
0
x
4
.
8
9
%

I'll leave you to do the rest yourself. Maybe you could edit your OP to include the individual returns per account/set of accounts?

As to whether they pay interest monthly or yearly, how can you open 7 accounts and not even take a cursory glance at the T&Cs and/or interest rates & fees documents? More worryingly, what else have you missed by not doing so?

eskbanker

In addition to the above points, just in case it's not stating the obvious (never assume....), all interest payments will be made with 20% basic rate tax deducted, unless you're a non-taxpayer and have completed the relevant R85 paperwork.