Interest Paying Current Accounts Advice

weatherbeard

Hi,

I'm new to this forum and I did search for the info I'm looking for but couldn't find an existing thread. But if there is one please feel free to direct me to it.

I'm looking to switching my current account to one which pays interest on the balance, specifically the Nationwide FLexDirect account. I was just wondering if someone could let me know how the interest is worked out? Is it calculated based on the balance of the account over the whole month or the balance at the end of the month? I'll be paying in about £1300 each month but at the end of the month I maybe only have about £100 in the account if that. Just trying to work out if it's worth switching and if so to which account.

At the moment I'm not earning any interest so I guess anything would be an improvement, but I just thought I'd ask what the experienced MSEs thought.

Thanks in advance

YorkshireBoy

Interest is calculated daily, on that day's closing balance. If you had a static balance throughout the month of, say, £1,300, than your interest for the calendar month of March would be...


£1,300 x 4.89% / 365 x 31 x 0.8 = £4.32 (net of BR tax)


As you'll have a fluctuating balance you'd need to do 31 different calculations to get your monthly interest figure! Or, simply take an average (if you spend linearly throughout the month).


Don't forget that there's another £130 available to you if you switch an account with at least 2 direct debits on it by firstly getting referred by a friend (£50) and then applying through a cashback site such as www.quidco.com (£80).


Do you have any friends or family with a Nationwide account?

Archi_Bald

Interest for all interest paying accounts is always calculated based on the balance of the account at the end of each day, and the gross annual interest rate divided by 365.

Your monthly interest payment is the sum of the interest earned daily during the previous month.

LplateSaver

Firstly don't switch your main account if you've been with them a long time, it looks good on your credit report/mortgage/loan applications etc to have a long history with your bank. Open up another account for the purpose of switching.

Secondly if an existing Nationwide customer refers you to Nationwide you get given £50 otherwise otherwise if you join topcashback and go through there they'll give you £84 in a few weeks.

Lastly interest is calculated daily and paid on the first working day of the next month but anything will help for you won't it? You could use the account to try saving a bit of your pay each month and it would gradually build up, you would need to find another account in 12 months though when the interest drops.