Nationwide 8% saver matured, but they haven’t paid the correct interest? Hoodwinked?

RoastPotatoes

I want to run this by you guys, but this feels wrong to me.

I saw an advert for a Nationwide saved last year for 8%. “Great” I thought. You can only pay in £200 per month, and when it mature in a year you get the interest.

So my account matured yesterday. Closing balance before interest paid is: £2,600.

Interest paid: £108.80.

How does this work? They also say on the homepage tax isn’t deducted.

I know it’s not a huge amount of money but it feels like the principle here. I wouldn’t have used their product if I knew the % would change. I’ve had no email or contact saying as much.

I will ring them up tomorrow but wanted to get a feeler if I’m being silly here?

penners324

Looks correct to me. Interest is paid on the balance the account every day.

So on average you've only had £2600 in the account for 6 months.

400ixl

That is the correct amount of interest as it is calculated daily on the balance. 

The percentage hasn't changed and unless the money was already earning at least 8% then you haven't lost out.

NorwichMan

Yes, interest is calculated daily on the balance, I received a similar amount of interest when mine matured last month and I'm happy. You do not get 8% of £2600 but approximately half that.

friolento

You don't get interest on money you have not deposited. You didn't have £2,600 in the account all year, therefore you don't get 8% of £2,600.

For further details, read https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/

wiseonesomeofthetime

If you check the Summary Box, which you would have read and saved before applying for the product, you will see that the estimated projected balance after 12 months with 0 withdrawals was £2,504, i.e. £104 interest.

You squeezed in an extra £200, which would have attracted interest for those few days at 8%pa, hence your extra £4.80

So should not be of surprise to you really tbh.

Eco_Miser

RoastPotatoes said:

I want to run this by you guys, but this feels wrong to me.

I saw an advert for a Nationwide saved last year for 8%. “Great” I thought. You can only pay in £200 per month, and when it mature in a year you get the interest.

So my account matured yesterday. Closing balance before interest paid is: £2,600.

Interest paid: £108.80.

Did you miss the part of the summary box that asks 'What would the estimated balance be after the 12 month term, based on 12 deposits of £200 totalling £2,400?' and the answer £2,504.00?

RoastPotatoes

Ok thanks all, was a misunderstanding on my part then.

fair enough, I think I’ll just infest that money going forward then, poor investment decision by me!

Eco_Miser

You were getting 8% on the money in the account, That's a good rate of return for no-risk investment.

AmityNeon

RoastPotatoes said:

Ok thanks all, was a misunderstanding on my part then.

fair enough, I think I’ll just infest that money going forward then, poor investment decision by me!

Do you expect returns on money you have yet to invest? Investing £200 once a month is not the same as investing £2,400 once a year.

Had you been able to deposit £2,600 immediately you would have received £208 in interest, so the question is, where was the uninvested money held during the first 11 months before the account balance reached £2,600? That's what you need to consider before you can calculate the actual return on your £2,600.

Middle_of_the_Road

RoastPotatoes said:

Ok thanks all, was a misunderstanding on my part then.

fair enough, I think I’ll just infest that money going forward then, poor investment decision by me!

Maybe some shares in Rentokil 🙂