How do I calculate interest due on a bank account?

Hungerdunger

Earlier this year my partner and I invested the proceeds from the sale of a business in a Standard Life Account for about three months while we were winding up the Company and sorting out all the loose ends.

Rather belatedly, I thought I'd check the amount of interest we received when the account was closed and am unable to reconcile the amount received with my own calculations.

I set up a spreadsheet which recorded the dates and amounts of all the deposits (4) and withdrawals (3) together with the interest rates which were applicable. But I don't want to look any more stupid than I normally do, so before I contact the bank to query their figures, I'm wondering whether there are any spreadsheets available which would do the calculation for me if I input all the data.

Crabman

Perhaps try the new Savings Calculator - though if you're trying to input multiple amounts you'll need to do each one separately then add up.

(if any probs with the calculator, click here to report)

Blowsy

Interest on deposits from bank accounts are paid net of 20% savings tax. Starting rate taxpayers can claim 10% back, basic rate have no further tax liability and higher rate tax payers have an additional 20% tax liability..

Hungerdunger

Crabman wrote: »

Perhaps try the new Savings Calculator - though if you're trying to input multiple amounts you'll need to do each one separately then add up.

Thanks, Crabman; the only problem with the calculator is (unless I'm missing something) that it can only calculate in months, but I really need days, as we opened the account in January; made four further deposits in February, and then three withdrawals during April.

C32AMG

Banks will calculate it on a daily balance.

Take your end of day balance and times it by your interest rate divided by 365.

For example, if you have a balance of £1000 in an account with 5% gross interest, your daily interest rate is 0.01369%.

Remember to take the tax off in calculating, though.

Hungerdunger

C32AMG wrote: »

Banks will calculate it on a daily balance.

Take your end of day balance and times it by your interest rate divided by 365.

I tried that on a spreadsheet with a separate line for each day we held the account and got the same figure as in my first spreadsheet which is about 10% less than the bank's figure.

However, last night I found this Daily Interest Calculator and this gives a figure which isn't the same as the bank's but is within striking distance of it.

EDIT: Had another look at the Daily Interest Calculator, and realised I had misunderstood their "Start Date" and "End Date". For instance, it thinks that a start date of 1 November and an end date of 3 November is a period of two days' interest. Having amended the dates, their figure is now nearer to mine than the bank's, but still not the same!

So I'm still confused. :huh: