Monthly interest on savings

I opened a fixed term savings account with Metrobank at 5.25% and understand monthly interest is paid at the begining of each month. it was opened 21st Dec 2023 so aprox 11 days so 5.25/12/31 =0.014% so  5000*0.014% is £7.70 They paid me 16p have I got it completely wrong ? failed maths gcse at school lol oh and they have reduced the interest rate to 5.1% dispite the t&c saying they will always give savings the highest rate they offer, now 5.22%
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  • ColdIron
    ColdIron Posts: 8,673
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    edited 4 January at 2:10PM
    Metro Bank doesn't offer a 5.25% fix, it's currently 5.66% (5.52% monthly) though now paused for new applications. That has been offered since 12/12/2023.
    oh and they have reduced the interest rate to 5.1% dispite the t&c saying they will always give savings the highest rate they offer, now 5.22%
    5.10% is the monthly rate for the easy access account, 5.22% annually
    Are you sure you have the fix or is it the easy access?
    What may have happened is that you have the easy access account and were not eligible for the higher rate. Your balance would need to be £500 and it would kick in (roughly) on the next business day. Prior to that the rate is 1.64%
    Edit: 1.64% not 1.65%
  • auser99
    auser99 Posts: 206
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    edited 4 January at 1:52PM
    How much did you put into the account on day 1, and how much have you added since?

    Like @ColdIron says above, there is no 5.25% fixed, so you probably are meaning the 5.1% easy access (5.22 is the compounded)

    You have to have £500 in the account to trigger the 5.1% rate the next day, otherwise it's 1.64% (assume 1.65% is AER).

    So from some very rough maths...

    say you had £400 in day 1

    £400 x 1.64% = £6.56
    Divide by 12 months  = 55p
    10 days divided by 31 days of Dec = 0.32258
    55p x0.322 - 0.177

    If they round down, that's 17p - just from my plucked from air numbers, but very close to your 16p
  • SickGroove
    SickGroove Posts: 228
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    edited 4 January at 10:45PM
    If you put over £500 into Metro Bank to trigger the 5.1% rate, do you always need to keep at least £500 in the account, in order to maintain that rate for 12 months once you've hit it?
  • sheslookinhot
    sheslookinhot Posts: 1,941
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    If you put over £500 into Metro Bank to trigger the 5.1% rate, do you always need to keep at least £500 in the account, in order to maintain that rate for 12 months once you've hit it?
    From Metro

    <<< You only need to meet the minimum account balance once to meet the eligibility criteria for a Limited Edition rate. There is no requirement to maintain a minimum account balance.>>>
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  • ChrisEllis
    ChrisEllis Posts: 11
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    I put in £5k on day one
  • AmityNeon
    AmityNeon Posts: 891
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    I put in £5k on day one

    16p of interest? Something's not right here. Even just £500 at 1.64% interest for 11 days results in 25p of interest.

    You likely have the Instant Access Savings account if the interest rate is currently 5.10% gross. Do you have just two transactions in your history for Dec 2023?

    Date          Details     Transaction Type   Out (£)   In (£)     Balance (£)
    29 Dec 2023               Credit Interest              0.16       5,000.16
    21 Dec 2023   (details)   Inward Payment               5,000.00   5,000.00
  • ChrisEllis
    ChrisEllis Posts: 11
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    AmityNeon said:

    I put in £5k on day one

    16p of interest? Something's not right here. Even just £500 at 1.64% interest for 11 days results in 25p of interest.

    You likely have the Instant Access Savings account if the interest rate is currently 5.10% gross. Do you have just two transactions in your history for Dec 2023?

    Date          Details     Transaction Type   Out (£)   In (£)     Balance (£)
    29 Dec 2023               Credit Interest              0.16       5,000.16
    21 Dec 2023   (details)   Inward Payment               5,000.00   5,000.00

    I have two transactions 21 Dec +£5000 and Credit interest 29th Dec +£0.16 and the ir now shows 5.52%

    Looking at it closer I realise the savings acc is 5.52% and the funding account (where the interest is paid into) is 5.1%
  • auser99
    auser99 Posts: 206
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    edited 6 January at 11:05AM
    AmityNeon said:

    I put in £5k on day one

    16p of interest? Something's not right here. Even just £500 at 1.64% interest for 11 days results in 25p of interest.

    You likely have the Instant Access Savings account if the interest rate is currently 5.10% gross. Do you have just two transactions in your history for Dec 2023?

    Date          Details     Transaction Type   Out (£)   In (£)     Balance (£)
    29 Dec 2023               Credit Interest              0.16       5,000.16
    21 Dec 2023   (details)   Inward Payment               5,000.00   5,000.00

    I have two transactions 21 Dec +£5000 and Credit interest 29th Dec +£0.16 and the ir now shows 5.52%

    Looking at it closer I realise the savings acc is 5.52% and the funding account (where the interest is paid into) is 5.1%
    That 5.52% rate is a monthly interest 1 year fixed bond.
    You haven't mentioned how much you've either put into that account, or the interest you've received so far. But maybe that's a red herring.

    The issue at hand is why you've only had 17p interest on an easy access account that should pay 5.1%.

    If you had the "old" metro easy access account, it pays 1.64%, end of story.

    You've had 5k in an account for 8 days. 8days at 1.64% is exactly 17p.

    However, if you set the "new" easy access account up, that should pay 5.1% from day 2 if you had at least £500 in there.

    So the question is do you have the old easy access account, limited at 1.64% or have you actually set the new account up which gives 5.1% (1 day after inputting 500 minimum).

    If you're adamant you have this new account and can actually see 5.1% quoted within your account,  you need to take this up with metro as it sounds an error.

    If when you say you can see 5.1% you mean within their terms, but not against your actual account,then I suspect you actually have the old easy access account.
  • AmityNeon
    AmityNeon Posts: 891
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    I have two transactions 21 Dec +£5000 and Credit interest 29th Dec +£0.16 and the ir now shows 5.52%

    Looking at it closer I realise the savings acc is 5.52% and the funding account (where the interest is paid into) is 5.1%

    What I suspect is that interest credited is never shown in the transaction history for the Fixed Term account, so the £0.16 in interest likely relates to the funds held in the Instant Access Account, not the £5K (or only very little of it).

    If you want further analysis (here and not from Metro), please sign into the app/online banking, list the accounts you have by name, their corresponding interest rates, and associated balance history (dates and amounts back to the beginning of Dec 2023).

  • AmityNeon
    AmityNeon Posts: 891
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    auser99 said:

    You've had 5k in an account for 8 days. 8days at 1.64% is exactly 17p.

    That is not the case: 5,000 * 0.0164 * 8/365 = £1.80

    Also note that Metro's monthly interest covers the whole previous calendar month, is paid on the next working day, but the transaction date is backdated to the previous working day. A deposit on 21 Dec 2023 earns interest for 11 days for the rest of December; accrued interest is paid on 02 Jan 2024 with a recorded transaction date of 29 Dec 2023.

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