Help me understand HSBC Loyalty ISA rates

TrustyOven

le_loup wrote: »

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

Ah it could be possibly explained by the rate drop.
But I'm confused...
I've had a letter from HSBC last year saying the rate dropped to 1%, but it seems on their site the 1.4/1.5% rates are advertised.

As for the 36 days... I initially assumed you meant that the interest period is between 26th to the next 26th, in which case there are more than 31 days in some of the periods.
But I guess given that you question my interpretation of what you wrote, I must be wrong, and I guess you meant that the period is 1 to NumberOfDaysInTheMonth, with the interest from the previous period paid on the 26th of the current. Is my new interpretation correct?

colsten

I don't think there was a drop in the rates since the product was announced in February 2014.

There are some nasty clauses in the T&Cs of the Loyalty ISA, such as

The Loyalty Rate will not be paid on any part of the balance in the Account that exceeds the maximum annual ISA subscription limit

Although this is unlikely to explain a drop in interest between September and February.

But may be this one does - - OP, when did you last make a payment into your ISA?

23.2 The Loyalty Rate applies for 366 days from the date of each payment into your Account. If you make further payments into your Account, the application of the Loyalty Rate will begin again from the date of each payment. Upon expiry of the Loyalty Rate, you will earn the Standard Rate until you make a further payment into your Account.

Best if the OP asks HSBC for an explanation and lets us all know, as it doesn't seem obvious where the differences come from.

TrustyOven

colsten wrote: »

I don't think there was a drop in the rates since the product was announced in February 2014.

Ah, you are correct and I was mistaken. I just checked the letter I received and it only applies to the e-ISA.

borderline

eskbanker wrote: »

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).

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....

Last time I put money in was in July... since then I’ve been paid:

27 Jul £25.31

27 Aug £28.76

27 Sep £28.80

27 Oct £22.44

27 Nov £23.92

27 Dec £23.17

27 Jan £23.97

27 Feb £24.00

27 Mar £21.71

eskbanker

OK, I take it back, it's not apparent at all! Taking it down to interest paid per day:
Aug 0.9277
Sep 0.9290
Oct 0.748
Nov 0.7716
Dec 0.7723
Jan 0.7732
Feb 0.7742
Mar 0.7753

The last few months all seem to be consistent (very slight increases month on month from compounding, as would be expected) so something happened in September/October, but if there was no rate drop and no withdrawals then I can't see where this interest reduction came from, so it looks like time to ask HSBC....

gt94sss2

eskbanker wrote: »

The last few months all seem to be consistent (very slight increases month on month from compounding, as would be expected) so something happened in September/October, but if there was no rate drop and no withdrawals then I can't see where this interest reduction came from, so it looks like time to ask HSBC....

If anyone gets an answer, I would be interested to know what it is. Looking back at an account I have with HSBC (not an ISA) I also see my interest last September/October was higher than the start of this year - despite no withdrawls etc..

Regards
Sunil