Santander 2.7% eSaver interest payment date

eskbanker

Topiary said:

I went for monthly interest option. I received my interest after 1 month but it remains within the account? was expecting this to be paid monthly away to a nominated account?

On what basis were you expecting that?

https://www.santander.co.uk/personal/savings-and-investments/savings/esaver

Interest is calculated daily and added to this account annually or monthly.

k_man

eskbanker said:

Topiary said:

I went for monthly interest option. I received my interest after 1 month but it remains within the account? was expecting this to be paid monthly away to a nominated account?

On what basis were you expecting that?

https://www.santander.co.uk/personal/savings-and-investments/savings/esaver

Interest is calculated daily and added to this account annually or monthly.

I don't think the Santander account has an option to even specify a nominated account. Which would have been my first clue 😉.

ibanarot

So it's been a month and a day, and having not received anything I contacted Santander:

The operator said that my interest payment is due today, but due to big backlog it hasn't been paid yet, but they should process it soon.

This makes me think that interest payments are processed manually by little Santander elves, and not automated by a .. you know a computer, as one would expect in late 2022.

Oh, well, hopefully 2.7% are worth it.

miller

They've paid me 32 days' interest, 2 days late as far as I can work out. Technically, you can't then achieve the advertised AER due to the late payment.

Sensory

miller said:

They've paid me 32 days' interest, 2 days late as far as I can work out. Technically, you can't then achieve the advertised AER due to the late payment.

Considering the AER is only rounded to 2 decimal places, you will still easily achieve 2.75% AER.

Without rounding, 2.72% gross compounded 12 times at exact calender month intervals (31 days, 28 days etc.) results in an AER of:
2.754164315846%

Shifting the number of calendar days around to alternate between 34 and 27 (instead of 30 and 31) and dropping February to 19 days, results in an AER of:
2.754091019204%

This is a difference of -0.000075829372%.

It would take a drastic shift in payment intervals to reduce the AER below 2.75%. An interval of: 7, 7, 7, 7, 7, 7, 7, 7, 7, 7, 147, 148 = 10 weekly interest payments followed by the eleventh 147 days later, with the twelfth and last payment 148 days later (= 365 days). This would result in an AER of:

2.744865713869%

miller

I assumed wrong thenl thanks for working that out. What your calculations do show is it's marginally better to select monthly interest in the first place and there is a bit of slack against the 2.75% AER.

Sensory

miller said:

I assumed wrong thenl thanks for working that out. What your calculations do show is it's marginally better to select monthly interest in the first place and there is a bit of slack against the 2.75% AER.

Interest is calculated daily using gross rates, which have a two-decimal standard of precision (in this case 2.72%). If interest compounds more than once a year, any resulting AER figure is just an approximation for comparison purposes. (Basically, they don't start with the AER figure and work backwards.)

Bettie

My first deposit was 11th Oct. No interest so far. Was there a choice to be paid yearly ? 

Mrnkar_2

Bettie said:

My first deposit was 11th Oct. No interest so far. Was there a choice to be paid yearly ? 

Yes you could choose yearly or monthly. If you go into your account you should be able to find out. Yearly interest will say 2.75. Monthly 2.72

ColdIron

Yes. What is the interest rate displayed? 2.75% would be annual, 2.72% would be monthly