Nat West Fixed Rate Interest Calculation

uih039

I'm struggling to understand the examples on this account and would be grateful if anyone could clarify.

Nat West have fixed rate accounts as follows:






The interest examples are:






The tables are extracted from this document: https://www.natwest.com/content/dam/natwest/personal/permanent/savings/documents/nw-pers-savings-ftsa-issues-202-203-information-sheets-01-06-2023.pdf

I just cannot get the arithmetic to work! As shown above, the tiers determine the rate and "This means you'll earn one rate on your entire account balance" so this is not like accounts which we occasionally see where the lower tier earns a lower rate even if the total balance exceeds the specified threshold.

So, taking the 1 year account as an example, the interest on 10k works perfectly using a rate of 5.01%. Also, the interest on 250k works at a rate of 5.12%. The one I simply cannot understand is the 100k example. According to the details above, this should give a rate of 5.12% but my arithmetic says it's 5.01% which is the rate for balances of £1 to £99,999.

I appreciate there will always be tiny differences due to number of days in the year and rounding, but I calculate the 100k interest to be £5,120 but the table above says £5,011.56.

The same problem is shown in the 2 year example.

Have I missed something or is there an error in the table?

I haven't asked the bank as I think it's unlikely their contact centre would be able to give a satisfactory answer so I thought I would ask the esteemed members of this forum!

Thanks.

Andrew.

masonic

It's clear from the worked examples that the interest on £10k is at the same rate as the interest on £100k, so the interest tier information is contradictory. Also, since interest is paid monthly, even balances slightly above £100k seem to be subject to the lower interest rate tier, and what happens between £99,999.01 and £99,999.99? Monthly interest can certainly result in a balance in this range, even if NatWest only accept deposits in whole £

Beddie

They've simply made a mistake and used the wrong interest rate for the higher balances on the second table.

uih039

I thought it must be a mistake but just wanted to check I wasn't missing anything. I find it surprising that a bank as big as Nat West does not have controls in place to pick up errors in documents but I guess we all make mistakes!

Thanks to you both for confirming my logic is correct..