NatWest interest incorrect

RG2015

I have just noticed that my NatWest Savings Builder interest for April has been incorrectly calculated. It should be 1.50% but the amount credited on 1st May was only 1.40%.

Prior to April, the interest was at a standard rate of 0.10% and a bonus of 1.40%. Now it is a single 1.50% but they appear to have not changed the rate when combining the rates into a single entry.

Therefore the account that has the most convoluted conditions is continuing to confuse NatWest themselves!

DrEskimo

Yea I think I'm in the same boat..

I had £4050.48 in the account from April 3rd, and today I got paid £4.66 in interest.
If my maths are correct, that's about 1.38%?

To be 1.5% it should be around £5.06 I believe?

Just when I finally got my head around how to use it properly....!

noh

Are you sure it's wrong?

1.5% aer equates to around 1.4% gross monthly.
Because the interest is paid monthly you get interest on the interest therefore the gross monthly rate is slightly lower than the aer..

RG2015

noh wrote: »

Are you sure?
1.5% aer equates to around 1.4% gross monthly.

1.50% AER equates to about 1.49% gross monthly although unlike Santander, NatWest do use 1.50% for calculating monthly interest. Or at least they have done up until April.

Thanks for your input, but 0.10% is far too high to be an AER / Monthly discrepancy.

noh

RG2015 wrote: »

1.50% AER equates to about 1.49% gross monthly although unlike Santander, NatWest do use 1.50% for calculating monthly interest. Or at least they have done up until April.

Thanks for your input, but 0.10% is far too high to be an AER / Monthly discrepancy.

Yes you're right I got my sums wrong.

youngretired

I've worked out your interest is correct from what you have said. Interest at 1.5% on £4050.48 is £60.75 per annum so divided by 365 is £0.166458 x 28 days £4.66. I checked my mums and hers works out right.

DrEskimo

youngretired wrote: »

I've worked out your interest is correct from what you have said. Interest at 1.5% on £4050.48 is £60.75 per annum so divided by 365 is £0.166458 x 28 days £4.66. I checked my mums and hers works out right.

Why 28 days....?

The mean number of days per month is 30.42. If it were 28, then there would only be 336 days in a year.

£0.166458 x 30.42 = £5.06, as per my original calculation.

PeacefulWaters

DrEskimo wrote: »

Why 28 days....?

The standardised number of days per month is 30.4. If it were 28, then there would only be 336 days in a year.

Banks are great at having statemented months of irregular days.

eskbanker

DrEskimo wrote: »

Why 28 days....?

Presumably because you said:

DrEskimo wrote: »

I had £4050.48 in the account from April 3rd

If that money was in the account for the whole month then you'd obviously be due a whole month's interest, but if it was in for 28 days of the month then interest would be paid pro rata....

AirlieBird

But the interest cycle runs from close of business on the second-last business day of one month, to close of business on the second-last business day of the following month.

So wouldn't interest be calculated to close of business on Friday 27th?

DrEskimo

eskbanker wrote: »

Presumably because you said:If that money was in the account for the whole month then you'd obviously be due a whole month's interest, but if it was in for 28 days of the month then interest would be paid pro rata....

I see that makes sense.

Although I wasn't clear in that I have had £4,000 in there since 22nd March.

However, I had to take out £1k, so knew I wasn't eligible for the bonus interest for the month of March, so just received £0.48. However if at the second last day of March there was £4,000.48, I then added £50 to get the bonus on April 3rd, would the bonus just be calculated on the £4,050.48 from the day the 'bonus amount' was paid in (i.e. April 3rd), despite having £4,000 in the account since March 22nd...?