At what time does account balance get recorded for credit interest calculations?

summersetsheep

Hello you wonderful people,

Have been following this forum for a while and just want to say thanks for the support and information you have offered. You treat yourself to a pint of beer, you have my permission.

Does anybody know when banks record the balance for interest calculation purposes?

I am sure it depends on the bank. Is it normal for it to occur at the close of business or at midnight?

I am asking because I had a DD transaction from my TSB account today and then I topped it up just now (~9.20pm) If the interest is calculated at the close of business, I would have lost out on a (a minimal) amount of interest at the value of the DD transaction. If it was at midnight, I would still retain interest for the entire transaction amount.

Thank you for reading.

masonic

I'm sure it varies. I know I've seen a cut off time of 10:30pm (IIRC) for internal transfers at one bank, after which they are treated as having been received on the following day. Faster payments received by the same bank could be different. You will probably find something buried in the T&Cs of your account that tells you how your bank operates.

YorkshireBoy

Anywhere between 20:15 and midnight, depending on the bank.

summersetsheep

Have been scouring the TSB T&Cs and this came up:

9.5
We will calculate any interest at the end of every
monthly billing period unless we tell you otherwise in
the additional conditions for your account. We may
also charge compound interest.

and

7.3
Payments into your account (other than cash and
cheque payments)
(a)
This section covers payments that are not made
by cash or cheque, such as standing orders and
direct transfers from another account.
(b)
When we receive a payment for your accountin sterling, we will show it in your account and it will earn any interest (or reduce the interest
you pay) from that day. We will allow you to use
it straightaway.

For money transferred in at any point in the day to count towards your interest, they would have to use midnight balance. This is what I am assuming from the above description as it is implicit.

YorkshireBoy

summersetsheep wrote: »

Have been scouring the TSB T&Cs and this came up:

and



For money transferred in at any point in the day to count towards your interest, they would have to use midnight balance. This is what I am assuming from the above description as it is implicit.

See condition 6.2(b) and the following para. And then, when you've called to ask them, please post back with what they say.

gt94sss2

summersetsheep wrote: »

Does anybody know when banks record the balance for interest calculation purposes?

I am sure it depends on the bank. Is it normal for it to occur at the close of business or at midnight?

As you say, this differs per bank and also if they are calculating credit or debit interest..

I am asking because I had a DD transaction from my TSB account today and then I topped it up just now (~9.20pm) If the interest is calculated at the close of business, I would have lost out on a (a minimal) amount of interest at the value of the DD transaction. If it was at midnight, I would still retain interest for the entire transaction amount.

For TSB - for debit interest:

Grace Period - if you go overdrawn, you have until 3.30pm (UK time) that day to pay in enough money to avoid overdraft fees and interest you may incur. The money needs to be immediately available to use, so you could transfer money from another personal account you have with us via Mobile Banking, Internet Banking or Telephone Banking or pay in cash at your nearest branch

For credit interest with TSB, its somewhere between 11pm and midnight

Regards
Sunil

Generali

summersetsheep wrote: »

Hello you wonderful people,

Have been following this forum for a while and just want to say thanks for the support and information you have offered. You treat yourself to a pint of beer, you have my permission.

Does anybody know when banks record the balance for interest calculation purposes?

I am sure it depends on the bank. Is it normal for it to occur at the close of business or at midnight?

I am asking because I had a DD transaction from my TSB account today and then I topped it up just now (~9.20pm) If the interest is calculated at the close of business, I would have lost out on a (a minimal) amount of interest at the value of the DD transaction. If it was at midnight, I would still retain interest for the entire transaction amount.

Thank you for reading.

It will either be close of business or the time at which they do their money market trades. For Barclays and Citibank that used to be 10am. The latest time is likely to be 4-5pm.

The ability to place money in the market starts to fall away after lunchtime so banks like to have a reasonably early cut off as otherwise they end up paying out to clients a lot more than they can get in the market.