Help me understand HSBC Loyalty ISA rates

borderline

I have an HSBC Loyalty cash Isa , the rate is 1.40% AER (1.39% tax free)
The thing I don’t understand is why some months I get less than others in interest.

for instance last September I got £28 paid in interest, the following month October I got only £22 ... In February £24, in March £21...
I don’t take any money out

why these variations on interest paid when the rate is supposed to be 1.40 % ?

Archi_Bald

Interest is calculated daily and paid monthly. Some months have fewer days than others so you will get least for February and most for months with 31 days.

gt94sss2

borderline wrote: »

I have an HSBC Loyalty cash Isa , the rate is 1.40% AER (1.39% tax free)
The thing I don’t understand is why some months I get less than others in interest.

The different number of days in each month. Interest will be calculated daily.

Are you eligible for the (free) HSBC Advance account? - You would then get 1.5% on your ISA and up to another £120 extra interest under their Save Together offer.

Regards
Sunil

borderline

gt94sss2 wrote: »

The different number of days in each month. Interest will be calculated daily.

Are you eligible for the (free) HSBC Advance account? - You would then get 1.5% on your ISA and up to another £120 extra interest under their Save Together offer.

Regards
Sunil

No, I don’t earn enough to qualify for an Advance account

borderline

Archi_Bald wrote: »

Interest is calculated daily and paid monthly. Some months have fewer days than others so you will get least for February and most for months with 31 days.

yes but in my examples are the opposite , in February being a shorter month I got more paid in than the following March...
and the difference between what I got in september to October it doesn’t make sense either

Archi_Bald

borderline wrote: »

yes but in my examples are the opposite , in February being a shorter month I got more paid in than the following March...
and the difference between what I got in september to October it doesn’t make sense either

In February, you get paid the interest earned in January.
March for February
and so on.

eskbanker

borderline wrote: »

yes but in my examples are the opposite , in February being a shorter month I got more paid in than the following March...

What day of the month is the interest paid? If it's not the last day of the month then you'd expect March to be lower than February as the period from n January to n February is going to be 31 days and then from n February to n March will be 28 days (29 in a leap year).

borderline wrote: »

and the difference between what I got in september to October it doesn’t make sense either

Some institutions (e.g. Lloyds group) pay on the first or second working day of the month, so introducing more variability by virtue of some interest periods reaching 32 or 33 days.

Post the actual days/dates and amounts of interest and it should all be apparent....

TrustyOven

Archi_Bald wrote: »

In February, you get paid the interest earned in January.
March for February
and so on.

But why is the OP not getting > £28 in February for January's interest?

January 2015 had 31 days, just like September 2014's interest payment (for August 2014, 31 days) of £28.

le_loup

The account pays out on 26th of each month. That is why the OP is confused.

TrustyOven

le_loup wrote: »

The account pays out on 26th of each month. That is why the OP is confused.

Unless I've made a big mistake in terms of which months are involved, here's my understanding:

26 Jan 2015 to 25 Feb 2015 (inclusive) = 36 days.
26 Aug 2014 to 25 Sept 2014 (inclusive) = 36 days.

Interest for 36 days from Aug to Sept 2014: £28
Interest for 36 days from Jan to Feb 2015: £24

Same interest rate, same number of days, shouldn't the interest for Jan-Feb be the same (a bit larger due to compounding) as Aug-Sept last year?

le_loup

Didn't the rate drop earlier this year.
..... and, I don't think there are ever 36 days in a month!