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  • Expotter
    Expotter Posts: 372 Forumite
    Third Anniversary 100 Posts Name Dropper
    edited 3 October 2022 at 9:51PM
    Penrith Building Society has released 3 new notice accounts at 30, 60 and 90 days at 2.55%, 2.75% and 2.95% respectively, the only problem is that they can only be opened and managed in branch or by post. Hopefully though, other banks will also increase their rates.
    https://www.penrithbs.co.uk/savings/longer-term-fixed-rate/#tab_30-day-notice-account
  • I suspect this is going to bore most of you but if there is someone out there as pedantic as me....... I like to check the interest expected against credited on my accounts.
    I have an OakNorth 90 day notice a/c that I funded with £15001 on 9th September. (£1 on the 8th which I'm effectively ignoring and £15000 on the 9th).This is confirmed in their transaction history.
    The rate was 2.26% from the outset up to the end of the month. I make that a total of £20.43 but they have only credited £19.31 interest on Oct 1st. I can't see where the discrepancy is and wondering if anyone is like me and has a spreadsheet to calculate interest and which might give a different answer. Apologies to the rest of you!
  • refluxer
    refluxer Posts: 3,187 Forumite
    1,000 Posts Fourth Anniversary Photogenic Name Dropper
    edited 4 October 2022 at 11:12AM
    I suspect this is going to bore most of you but if there is someone out there as pedantic as me....... I like to check the interest expected against credited on my accounts.
    I have an OakNorth 90 day notice a/c that I funded with £15001 on 9th September. (£1 on the 8th which I'm effectively ignoring and £15000 on the 9th).This is confirmed in their transaction history.
    The rate was 2.26% from the outset up to the end of the month. I make that a total of £20.43 but they have only credited £19.31 interest on Oct 1st. I can't see where the discrepancy is and wondering if anyone is like me and has a spreadsheet to calculate interest and which might give a different answer. Apologies to the rest of you!
    If you had £1 in there at some point on the 9th, then did you ignore that date too in your calculations ? IIRC, they use the lowest balance on any one day, not the highest.

    £15,001 @ 2.26% from 10th to 30th Sept (inclusive) is £19.51 according to this calculater.
  • RG2015
    RG2015 Posts: 6,054 Forumite
    Ninth Anniversary 1,000 Posts Name Dropper Photogenic
    edited 4 October 2022 at 12:33PM
    I suspect this is going to bore most of you but if there is someone out there as pedantic as me....... I like to check the interest expected against credited on my accounts.
    I have an OakNorth 90 day notice a/c that I funded with £15001 on 9th September. (£1 on the 8th which I'm effectively ignoring and £15000 on the 9th).This is confirmed in their transaction history.
    The rate was 2.26% from the outset up to the end of the month. I make that a total of £20.43 but they have only credited £19.31 interest on Oct 1st. I can't see where the discrepancy is and wondering if anyone is like me and has a spreadsheet to calculate interest and which might give a different answer. Apologies to the rest of you!
    Yes, it's a quirk of OakNorth to calculate interest on the lowest balance during the day. If you started the 9th with £1 then the £15k would not earn any interest on the 9th.

    The AER is 2.26% but this is equivalent to 2.237% for monthly non compounded interest.

    Hence £15,001 x 2.2377% x 21/365 = £19.31 

    Edit: This is the formula which works in Excel (using the 2.2377%)

    =((1+(2.2377%/12))^12-1)*100

    Courtesy of @eskbanker on an earlier post.
  • refluxer
    refluxer Posts: 3,187 Forumite
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    RG2015 said:
    The AER is 2.26% but this is equivalent to 2.237% for monthly non compounded interest.

    Hence £15,001 x 2.2377% x 21/365 = £19.31 

    Ah, I was wondering about the 20p discrepancy between the online calculator I used and the actual interest earned.
  • My thanks to refluxer and RG2015, each showing an error in my understanding. What actually happened was that I made a test transfer of £1 on 8th Sep. That cleared fairly quickly but I thought I was being clever but not transferring the main deposit the same day as I had read that the interest was calculated on the minimum amount of the day. I transferred the £15000 on 9th Sep, not realising of course that there was already £1 in the account from the day before and that the days interest would be worked out on this. The point here, for those like myself that send a test amount, is that, whenever you follow up with a second (usually larger) amount you will always lose a day's interest on that amount. I don't know if that's standard practice but I think it's a trifle sneaky.
    On the other point, where can you find the formula for reducing the AER to monthly non compounded interest?
  • RG2015
    RG2015 Posts: 6,054 Forumite
    Ninth Anniversary 1,000 Posts Name Dropper Photogenic
    edited 4 October 2022 at 2:03PM

    On the other point, where can you find the formula for reducing the AER to monthly non compounded interest?
    I put the Excel formula for 2.26% / 2.2377 on my previous post. I will see if I can find a more generic one for you.

    Edit: Here it is plus a link for more details.

    AER = (1+r/n)^n-1

    In this equation, r stands for interest rate per annum, while n refers to the number of compounding periods per annum. 

    This is actually the formula for converting basic to aer, but you should be able to reverse it.

    https://cybercrew.uk/finance/what-is-aer/


  • Burcot
    Burcot Posts: 104 Forumite
    Third Anniversary 100 Posts Name Dropper
    Some amazing, smart and kind people on this BB.  So impressed. 
  • Penrith Building Society have now made their new notice accounts available to Cumbria residents only. How bizarre. 
  • jimexbox
    jimexbox Posts: 12,481 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Penrith Building Society have now made their new notice accounts available to Cumbria residents only. How bizarre. 
    Wise decision, if that was open to all, online. They would be totally overwhelmed with applications. Great notice accounts. 
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