How is interest worked out on current accounts?

lyle1993

I have a TSB Classic Plus account which pays 4% interest (after tax) monthly on balances up to £2000. I'd worked out that seen as i have well over 2000 in there all the time, that each month i'd be getting 4% of 2000, so £80 in interest a month.
However, can someone tell me how interest is actually worked out as today i only got paid just over £6?!

PaulC5

4% per annum

4% of 2000 = 80
80 divided by 12 = 6.66

CLAPTON

lyle1993 wrote: »

I have a TSB Classic Plus account which pays 4% interest (after tax) monthly on balances up to £2000. I'd worked out that seen as i have well over 2000 in there all the time, that each month i'd be getting 4% of 2000, so £80 in interest a month.
However, can someone tell me how interest is actually worked out as today i only got paid just over £6?!

4% of 2000 is 80 PER YEAR
or something like 80/12 = £6.66 per month

lpgm

They might pay you a bit of it each month, but it's 4% for a year!

dcouponzzzz

I am completely guessing, but maybe it's worked out annually? 4% of 2k is 80quid and you lose some to tax, so you get a total of £64 annually on 2k for basic 20% tax. Maybe this is wrong though as you'd get £5.33 p/m.... probably wrong

HappyMJ

I would save so much more if a bank paid £80 per month on a £2,000 balance.

lyle1993

Thanks guys, bit of a wounder when I've built myself up that I'm getting £80 a month and it turns out only to be £6 haha.
Live and learn.