First Direct Regular Savings Account

I have a regular savings account with First Direct with a 7% AER/Gross p.a. interest rate.  You could only put a maximum of £300 per month (which I did) and the interest was payable after 1 year.  I assumed it would be 7% of the total (£3600) which I calculated as £252 but they have only paid me interest of £136.50.  I have queried it with them but they say it is calculated on a daily basis and is correct.  What am I missing?!

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  • ColdIron
    ColdIron Posts: 8,639
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    edited 5 December 2023 at 3:12PM
    You are missing the fact that you didn't have a balance of £3,600 for a year, No one will pay you interest on money that is not in your account
    Read this
    And this (Key Product Info - What would the estimated balance be after 12 months based on 12 monthly deposits of £25 and £300?)
  • surreysaver
    surreysaver Posts: 3,969
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    edited 5 December 2023 at 3:23PM
    I have a regular savings account with First Direct with a 7% AER/Gross p.a. interest rate.  You could only put a maximum of £300 per month (which I did) and the interest was payable after 1 year.  I assumed it would be 7% of the total (£3600) which I calculated as £252 but they have only paid me interest of £136.50.  I have queried it with them but they say it is calculated on a daily basis and is correct.  What am I missing?!
    You haven't got £3,600 in it for a year.  You've only got £300 in it for a year, then another £300 for eleven months, then another £300 for ten months etc, until you get to the final month when you have £3,600 in it for a month.
    The average balance over the course of the year is £1,950, and that is what they pay 7% on.
    I consider myself to be a male feminist. Is that allowed?
  • The NatWest and RBS regular savers (Digital Savers) pay interest monthly. Perhaps others should too, as its much more obvious how they work then
    I think you would still get questions  asked about the above account
    First direct gives you a estimate what you would earn in the summary before application 


  • 35har1old said:
    The NatWest and RBS regular savers (Digital Savers) pay interest monthly. Perhaps others should too, as its much more obvious how they work then
    I think you would still get questions  asked about the above account
    First direct gives you a estimate what you would earn in the summary before application 


    As does every financial savings product provider that I have ever taken out, albeit most just base it per £1,000.

    Unfortunately, not everyone reads the literature that comes with financial products they open, which leads to misunderstandings down the line.

    That's where forums, and helpful responders, come into the fore.

    I see the OP's question posted a lot, I have just learned to "scroll on". 
  • Never sign up to something you don’t understand.
    As stated above they tell you upfront what the interest will be.
    One year they paid me £1.13p less than the figure quoted.
    I call and was given the £1.13p, so I was happy.
  • Thank you for all those who left helpful comments, I appreciate the explanation!
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