Interest rate vs. What you get

Hi all, I have the majority of my savings in Tandem bank which allows a 2.95% interest rate I think. I’ve just accrued £58 at the end of this month, but thought with the amount I have in there, I would’ve got more?

My initial calculations suggested I would get £1,400 a year approximately but if you multiply £58 by 12 as a rough calculation, you don’t get to that number..

Sorry for the newbie/silly post but just wanted to check. The amount I have in there is £50k

Thanks,

Comments

  • Did you have £50,000 in that account for the whole of January?

    Did the interest rate change during January?
  • SAC2334
    SAC2334 Posts: 858 Forumite
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    Using L and C Mortgaes Savings Interest Calulator , £50 k for a full month at 2.95 % makes £123 a month  before tax or if you are a 20%  tax payer it makes   £98 a month.

    You can t have had that amount for the full month  since you deposited it .
  • Albermarle
    Albermarle Posts: 26,942 Forumite
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    SAC2334 said:
    Using L and C Mortgaes Savings Interest Calulator , £50 k for a full month at 2.95 % makes £123 a month  before tax or if you are a 20%  tax payer it makes   £98 a month.

    You can t have had that amount for the full month  since you deposited it .
    More accurately, if you are a basic rate taxpayer, who has exhausted their £1000 personal savings allowance  elsewhere.
    Or if the OP earns less than £17,500, then they can also make use of the savings starter rate.
  • AmityNeon
    AmityNeon Posts: 1,076 Forumite
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    edited 2 February 2023 at 11:31AM
    Which Tandem account is offering 2.95%?

    Interest is calculated daily, so your account balance at the end of each day is multiplied by the gross interest rate, then divided by 365. The daily amounts accrue and are paid gross so your tax position won’t affect the amount received.
  • wmb194
    wmb194 Posts: 4,579 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    The first thing you need to do is confirm the rate of interest your account(s) is earning.
  • grumbler
    grumbler Posts: 58,629 Forumite
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    SAC2334 said:
    Using L and C Mortgaes Savings Interest Calulator , £50 k for a full month at 2.95 % makes £123 a month  before tax or if you are a 20%  tax payer it makes   £98 a month.

    We are talking here about the amount credited to the account, that has nothing to do with taxes as banks don't collect tax on the interest they pay.


  • RG2015
    RG2015 Posts: 6,043 Forumite
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    edited 2 February 2023 at 2:07PM
    I have just had a look at the Tandem instant access account and do not see 2.95%.

    The rate is shown as 2.52% gross or 2.72% gross with the 0.20% top up. If you choose monthly interest you get the gross rate, not the AER rate which is 0.03% higher to factor in annual interest compounding.

    £50,000 would give the following.

    £50,000 x 2.52% x 17 days / 365 = £58.68

    or

    £50,000 x 2.72% x 16 days / 365 = £59.62

    This looks like the £50,000 was deposited on about 14th or 15th January.


  • RG2015
    RG2015 Posts: 6,043 Forumite
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    edited 6 April 2023 at 7:04PM
    Tandem is now showing as 3.05% with the bonus so you have a good deal here Deleted_User


    https://www.tandem.co.uk/products/savings

  • jimjames
    jimjames Posts: 18,503 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    To answer the question originally raised, the interest rate IS what you get. If your calculation doesn't give the same value then either the rate or amount is wrong in your calculation. I was expecting a regular saver question where the query about rates occurs very regularly!
    Remember the saying: if it looks too good to be true it almost certainly is.
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