NSandi investment account confusion

blinky003

Hi all new here,

I'm not very good with interest and money and things so if anybody can help me with this I would me very thank full.

My partner found her old post office savings book and found it had £30 in it from 20 years ago.

The NSandI are saying that the amount now after interest is only £48 which works out right if the interest is paid on it yearly.

Here is what is confusing me, the guy on the phone was very rude and basically refused to help me, but in the back of the savings book it states and I quote:

"interest is calculated on a daily basis and is earned on each whole pound for each day it is held"

I see that as , interest% of 30 * 365 * 20
to me that's what it says that's the interest calculated for every day.

Any help on this would be fantastic as I said i'm rubbish with interest rates.

CLAPTON

blinky003 wrote: »

Hi all new here,

I'm not very good with interest and money and things so if anybody can help me with this I would me very thank full.

My partner found her old post office savings book and found it had £30 in it from 20 years ago.

The NSandI are saying that the amount now after interest is only £48 which works out right if the interest is paid on it yearly.

Here is what is confusing me, the guy on the phone was very rude and basically refused to help me, but in the back of the savings book it states and I quote:

"interest is calculated on a daily basis and is earned on each whole pound for each day it is held"

I see that as , interest% of 30 * 365 * 20
to me that's what it says that's the interest calculated for every day.

Any help on this would be fantastic as I said i'm rubbish with interest rates.

the interest would be (ignoring compounding for a moment)

30 x 365 x 20 x daily interest rate

the daily interest rate would be = annual interest rate /365

assuming an annual interest rate of say 0.1%
you would expect to get

30 x 365 x 20 x0.1 / 365 /100 = 60 pence

all ignoring compounding

blinky003

Ah thank you, damn, living room really needs a good paint haha

well thank you again, its times like this i wish i paid attention in maths

Pincher

blinky003 wrote: »

Hi all new here,

I'm not very good with interest and money and things so if anybody can help me with this I would me very thank full.

My partner found her old post office savings book and found it had £30 in it from 20 years ago.

The NSandI are saying that the amount now after interest is only £48 which works out right if the interest is paid on it yearly.

Here is what is confusing me, the guy on the phone was very rude and basically refused to help me, but in the back of the savings book it states and I quote:

"interest is calculated on a daily basis and is earned on each whole pound for each day it is held"

I see that as , interest% of 30 * 365 * 20
to me that's what it says that's the interest calculated for every day.

Any help on this would be fantastic as I said i'm rubbish with interest rates.

If yearly interest is 3%, so after one year, you have £30 + 90p.
That is £30 x 1.03 = £30.90


You are saying you should have £30 x 1.03 x 1.03 etc. 365 times.


1.03 ^ 365 = 48482.72


So, after a year of daily interest at 3%, you should have £1,454,460.


You should teach a seminar for Pay Day Loan lenders.

eskbanker

CLAPTON wrote: »

the interest would be (ignoring compounding for a moment)

30 x 365 x 20 x daily interest rate

the daily interest rate would be = annual interest rate /365

assuming an annual interest rate of say 0.1%
you would expect to get

30 x 365 x 20 x0.1 / 365 /100 = 60 pence

all ignoring compounding

Since the interest is only "earned on each whole pound for each day it is held", the 'whole pound' stipulation is likely to be significant too on a small amount like this, i.e. if it takes more than a year to earn a whole pound in interest then the benefit of compounding won't be as pronounced as it normally would be....