Flagstone/Shawbrook 2% 6-month bond on MSE is not 2% PE

Scarlet.1

Hi
I saw Shawbrook's 6-month bond at 2% on here at the end of June and I opened an account assuming I would be getting 2% on my investment. I checked my balance today and the return is only 1%. I have been told that's becasue the actual rate they were offering was 2% per annum so for 6 months you only get a 1% return, not 2% I feel stupid because but I don't remember when I signed up fo it seeing anything about 2% being the annual rate and 1% being the 6-month rate. I wondered if anyone else on here invested and made the same mistake.

Daliah

The interest rate is 2% AER, where the A stands for annual. The entire industry quotes interest rates as AER, so they are easily comparable. 

Obviously, if you don’t keep your money deposited for an entire year, you don’t get an entire year’s worth of interest. This doesn’t mean that the AER is any different to what it was quoted when you took out your account. If it was only 1%, your return would only be half of what you got. 

eskbanker

Interest rates should always be shown as AER, the Annual Equivalent Rate, and the Shawbrook page at the time certainly complied with this in making it clear that 2% was the annual rate:

https://web.archive.org/web/20220526185217/https://www.shawbrook.co.uk/direct/savings/personal-savings/fixed-rate-bonds/

Scarlet.1

eskbanker said:

Interest rates should always be shown as AER, the Annual Equivalent Rate, and the Shawbrook page at the time certainly complied with this in making it clear that 2% was the annual rate:

https://web.archive.org/web/20220526185217/https://www.shawbrook.co.uk/direct/savings/personal-savings/fixed-rate-bonds/

Thank-you eskbanker, I will know next time.