TSB Classic Plus Current Account Switch Incentive - £100

eskbanker

derrick wrote: »

What interest should be received monthly on the Classic Plus account?

I opened with £2000 on 05th May 2014 and kept £2000 in the account.

Interest received, (gross):

01st June; £7.50
01st July: £7.24

Surely @ 5% gross July should have been: £8.49. (31 days)

The interest paid on 1 July is that earned in June (actually from 2 June to 1 July), which is 30 days not 31. Also, the gross interest rate is 4.89%, the 5% is the AER achieved by compounding (not possible to get this on the full £2K).

So, you should have received £2000 x 4.89% x 30/365 = £8.04 if you're eligible and registered for gross interest.

No idea why you didn't get this figure, I received 80% of this after tax - did you definitely have exactly £2K in the account for every day during that period?

originator

I get mine paid gross too.June 2nd paid £8.31 for the full month with £2000 and July 2nd paid £8.04

eskbanker

derrick wrote: »

And why is the interest on 01st June, (05th May to 30th May inc), 26 days, more than 01st July, (01st June to 30th June), 30 days?

Interest paid on 1 June would have been the 28 days from 5 May to 1 June inclusive, so 28 days. £2K x 4.89% x 28/365 = £7.50, so you received exactly what you were due in June, even if the July payment doesn't sound right....

derrick

eskbanker wrote: »

The interest paid on 1 July is that earned in June (actually from 2 June to 1 July), which is 30 days not 31. Also, the gross interest rate is 4.89%, the 5% is the AER achieved by compounding (not possible to get this on the full £2K).

So, you should have received £2000 x 4.89% x 30/365 = £8.04 if you're eligible and registered for gross interest.

No idea why you didn't get this figure, I received 80% of this after tax - did you definitely have exactly £2K in the account for every day during that period?

I had corrected the days re June, and am registered for gross interest, but the rest is correct.

Pretty much £2K in every day, may had an odd day with £1-2 short but not to amount to the difference shown.

eskbanker wrote: »

Interest paid on 1 June would have been the 28 days from 5 May to 1 June inclusive, so 28 days. £2K x 4.89% x 28/365 = £7.50, so you received exactly what you were due in June, even if the July payment doesn't sound right....

I should have put 27 days, I am sure interest is paid on a full calendar month and paid into account on 1st of the month, which it is.
The amounts are wrong, but I will wait until 01st August and see what they pay for July.

They should no be allowed to quote 5% if the true rate is 4.89.
.

colsten

derrick wrote: »

They should no be allowed to quote 5% if the true rate is 4.89.
.

You misunderstand how interest rates are quoted, and what they mean.

It is 100% correct that the AER of the TSB Plus account is 5%, and the gross rate is 4.89%. Both are listed as that on the TSB website and any TSB literature.

The AER can only be achieved if your interest compounds at the gross rate. If you have the maximum balance in your account for the entire year, interest cannot compound, and therefore the maximum you can achieve in this account if it is maxed for 365 days of the year is 4.89%. Daily interest will always be calculated using the gross rate.

This might be news to you but it has been a fact ever since AER has been established to allow people to compare like with like rates.Digest this: http://www.investopedia.com/terms/a/aer.asp

eskbanker

derrick wrote: »

Pretty much £2K in every day, may had an odd day with £1-2 short but not to amount to the difference shown

So there is obviously some sort of transactional activity going on with this account?

The £7.24 figure you quote is 27 days worth of interest, did you perhaps adjust paperless settings on the account during June, i.e. were there maybe three days where you didn't qualify for any interest? Not sure if they break down interest-earning qualification to a daily level though....

Anyway, assuming it's not something daft like that then you have three choices:

1. Trust them to have got it right
2. Ask them to explain their calculation
3. Post more details about daily balances during June so posters here can perhaps offer more concrete advice

derrick

eskbanker wrote: »

So there is obviously some sort of transactional activity going on with this account?

The £7.24 figure you quote is 27 days worth of interest, did you perhaps adjust paperless settings on the account during June, i.e. were there maybe three days where you didn't qualify for any interest? Not sure if they break down interest-earning qualification to a daily level though....

Anyway, assuming it's not something daft like that then you have three choices:

1. Trust them to have got it right
2. Ask them to explain their calculation
3. Post more details about daily balances during June so posters here can perhaps offer more concrete advice

TSB interest paid into account, account opened 05th May 2014 with £2000 deposit and maintained.

05th May to 30th May inc, (27 days), interest paid into acc 01st June; £7.50

01st June to 30th June inc, (30 days), interest paid into acc 01st July; £7.24. Surely this should be £8.04 even using your dates.


I registered on opening for paperless.

I disagree about the interest period being from the 2nd to the 1st, I cannot find reference to this but there is reference to the monthly deposit requirement where it say £500 monthly deposit, therefore it seems logical that the interest is paid per calendar month, although mute because the total days will be the same.

As I said earlier I will wait until 01st August and see what they pay for July, this should be £8.04 and if it is then there is a problem with the interest payment on 01st July, if it is the same as July's payment them I will need to call them.


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YorkshireBoy

derrick wrote: »

I disagree about the interest period being from the 2nd to the 1st, I cannot find reference to this

You can disagree all you like...but you'd still be wrong!

The TSB interest period runs from the 2nd working day of the month to the 1st working day of the next month...just like Club Lloyds...just like Lloyds Vantage...just like BoS Vantage...just like TSB Enhance (is that still running?). It's paid at the end of the 1st working day of the month...in effect, the early hours of the morning of the 2nd working day of the month. Due to this, the number of days in each interest earning period can range from 28 to 34 days, with the latter being possible if weekends and Bank Holidays get in the way.

YorkshireBoy

derrick wrote: »

05th May to 30th May inc, (27 days), interest paid into acc 01st June; £7.50

Actually this disproves your theory about calendar months.

5th May to 1st June (inclusive) is 28 days.

£2,000 x 4.89% / 365 x 28 = £7.50

Dird

Apparently the DDs somehow changed to 23/24th Aug instead of Today so they won't have pulled before my switch on Monday...at least they're visible on the account though. After the switch I'll adjust the dates to a week later