Gross interest - help needed!

davidobee

Dear All

I am struggling to work out my interest for this year. The bank I am referring to is the Halifax help-to-buy ISA (given the increased interest rate).

I have been paying £200 a month to this account since last year and have just been given this years interest.

Based on the savings, I worked out the interest to be £198 (£5,679 x 0.035%).

The interest received is £157.69 (GROSS).

I am mystified as to why?

If anybody is able to help me with my enquiry I would be very grateful.

Kind regards

David.

Linton

Perhaps you havent taken into account the fact that £1200 out of your £2400 paid in this year was in the account for 6 months or less. You only get interest on the money actually in your account.

System

Is £5,679 your average balance or the balance at the end of the year? The £200 you paid in last month only gets one month of interest 3.5%/12=0.29%!

Zanderman

davidobee wrote: »

Dear All

I am struggling to work out my interest for this year. The bank I am referring to is the Halifax help-to-buy ISA (given the increased interest rate).

I have been paying £200 a month to this account since last year and have just been given this years interest.

Based on the savings, I worked out the interest to be £198 (£5,679 x 0.035%).

The interest received is £157.69 (GROSS).

I am mystified as to why?

You paid 2400 in over the year.. You had 3279 in already.

3279 earns .035% which is 114.

The 2400 also earns this but only the first 200 gets a year's worth of .035, the rest gets 11/12, 10/12, 9/12 and so on of .035. Actual interest earned on new money is about 43

Total interest is therefore 157

davidobee

This is my first post on moneysavingexpert.com and I can not fault the response rate. I am extremely grateful for your replies as it totally clears up my confusion!

Thank you.

Best wishes.

David.