How is daily interest calculated?

Calavera

In general how do banks calculate daily interest: is it based on the value in the account at 23:59:59, is it the smallest value the account reached, is it some sort of averaging fluctuation of the days value etc.

For example I have a Barclay's rainy day saver with £5000 in it. I took out all £5000 for a project, then turned out I didn't need it so put it back within an hour. At 00:00:01 it had £5000, at 23:59:59 it had £5000. For about 45 minutes in the afternoon it had £0. What level of interest will I get for that day?

wmb194

Calavera said:

In general how do banks calculate daily interest: is it based on the value in the account at 23:59:59, is it the smallest value the account reached, is it some sort of averaging fluctuation of the days value etc.

For example I have a Barclay's rainy day saver with £5000 in it. I took out all £5000 for a project, then turned out I didn't need it so put it back within an hour. At 00:00:01 it had £5000, at 23:59:59 it had £5000. For about 45 minutes in the afternoon it had £0. What level of interest will I get for that day?

It's calculated on the balance at the day's cut-off time. I'm not sure when Barclays' is but if it was just 45 minutes in the afternoon it should be calculated based on a balance of £5,000. The cut-offs vary by bank but they're usually in the evening or at midnight.

RG2015

Calavera said:

In general how do banks calculate daily interest: is it based on the value in the account at 23:59:59, is it the smallest value the account reached, is it some sort of averaging fluctuation of the days value etc.

For example I have a Barclay's rainy day saver with £5000 in it. I took out all £5000 for a project, then turned out I didn't need it so put it back within an hour. At 00:00:01 it had £5000, at 23:59:59 it had £5000. For about 45 minutes in the afternoon it had £0. What level of interest will I get for that day?

It is the cleared balance at the end of the day

Some banks have cut off times earlier than 23:59:59 and the transaction will be dated the following day. However, if it shows in your online banking or app you should get the interest for the day.

If your £5k in and out was in the afternoon, and your closing balance shows as £5,000.00. you should be fine.

£5,000.00 x 5.00% / 365 = £0.68