NatWest Regular Saver

noh

The Summary box states.
"Interest is calculated on a daily basis and paid into your account on the first business day of the month. You’ll be able to see and access the interest in your account on the following day.'

Although that isn't absolutely clear. If you think about the period between the first business day of each month and the length of a calendar month is different and depends on dates of weekends and bank holidays.
I would expect to see 30 days interest next month around £4.11

Merlin139

Both myself and DW have an account which has been at £1000 for a few months and we are getting similar amounts of interest as the OP.

I would only expect to see 1/12th of £50 each month (£4.17) once the £1000 had been in the account for 12 months and the interest rate staying at 5% for the period. Less each month until the 12 month point.

The way I understand it is that if you saved £50 for 1 year 8 months so your total saved would be £1000 the total interest paid would equal £44 if the interest rate was 5% for the whole of the time.

Figure obtained here: https://www.moneysavingexpert.com/savings/regular-savings-calculator/

nedwilsher

noh said:

The rate was raised to 5% on 21 September.
The first full month of 5% was October. Interest paid on the first working day of November.
The daily interest amount you have calculated is correct 13.7p a day.
You and I received £3.98 which is 29 days interest.
It appears that the period that they use for the calculation of interest is not a calendar month but is the period between the first business day of each month.
If you check the calendar you will see that between the first business day of October and that of November 29 days elapsed.

The 29 days will explain it. I also have a Barclays Rainy Day account (5.12% AER) and that seems to work on calendar months.

I did not recall an interest rate adjustment - so that will alos explain lower sums in previous months.

Thanks a zillion for your input. I knew it had to be me that had a flawed calculation.

Section62

pedrodelgado said:

Hi, on regular savers the actual rate over the whole year assuming you put the same amount away each month, will work out at approx half the headline rate. This is because you don't have the full end of yr amount in the account for the full 12 months. 

No, the "actual rate" will still be the amount the bank or building society says it is paying on the account.

Though the amount of interest earned will approximate to the "actual rate" multiplied by the average balance over the year, which for a one-year regular savings account fully funded will be approximately half the final balance.