How can I calculate if my monthly ISA interest is correct?

whalemoney

Hi I have an ISA £79,767.34 with a rate that is now currently at 4.5%.  Last months interest was £266.65.

How can I calculate if that's correct?

It doesn't seem correct as I have a Chase Saver with 25k in it and that earned £92.98. 

Considering that's only a third in the Chase Saver than the ISA, I don't get why the ISA is earning not much more than half of what Chase is earning.

subjecttocontract

It doesn't look right but I'll let you do the maths........Balance X 4.5% divided by 365 then X days in month.

Dazed_and_C0nfused

whalemoney said:

Hi I have an ISA £79,767.34 with a rate that is now currently at 4.5%.  Last months interest was £266.65.

How can I calculate if that's correct?

It doesn't seem correct as I have a Chase Saver with 25k in it and that earned £92.98. 

Considering that's only a third in the Chase Saver than the ISA, I don't get why the ISA is earning not much more than half of what Chase is earning.

Was £79,767.34 the balance at the start of the latest interest period?

What period did the interest cover?

£299 seems a more likely ISA interest value but you haven't provided sufficient information yet to know if there is anything wrong or not.

masonic

You will need the gross rate (not AER) to work out interest if it is being paid monthly. Then you will need the period over which interest is paid, specifically the number of days in this period. You can divide the gross rate by the number of days in the year and then multiply by the number of days in the interest period, then multiply by your starting balance (assuming no payments in or out during the period).

It looks a bit low to me, even for a 30 day month. However, I strongly suspect the reason for this is not an error by the bank.

whalemoney

Dazed_and_C0nfused said:

whalemoney said:

Hi I have an ISA £79,767.34 with a rate that is now currently at 4.5%.  Last months interest was £266.65.

How can I calculate if that's correct?

It doesn't seem correct as I have a Chase Saver with 25k in it and that earned £92.98. 

Considering that's only a third in the Chase Saver than the ISA, I don't get why the ISA is earning not much more than half of what Chase is earning.

Was £79,767.34 the balance at the start of the latest interest period?

What period did the interest cover?

£299 seems a more likely ISA interest value but you haven't provided sufficient information yet to know if there is anything wrong or not.

Was £79,767.34 the balance at the start of the latest interest period?
No.  It was £79,767.34 minus the £266.65 I've earned this month.

What period did the interest cover?
Monthly payment

whalemoney

masonic said:

You will need the gross rate (not AER) to work out interest if it is being paid monthly. Then you will need the period over which interest is paid, specifically the number of days in this period. You can divide the gross rate by the number of days in the year and then multiply by the number of days in the interest period, then multiply by your starting balance (assuming no payments in or out during the period).

It looks a bit low to me, even for a 30 day month. However, I strongly suspect the reason for this is not an error by the bank.

That isn't the AER.  AER is 4.67%.  The only two interest figures on the app (Plum - absolute sh*te bank and app) are;
AER 4.67
VAR 4.05

So I went with the lower figure of the two when I posted my initial question.

Surely there's a calculator online people use that'll work it out?  Can't find any websites and losing patience.

Dazed_and_C0nfused

whalemoney said:

Dazed_and_C0nfused said:

whalemoney said:

Hi I have an ISA £79,767.34 with a rate that is now currently at 4.5%.  Last months interest was £266.65.

How can I calculate if that's correct?

It doesn't seem correct as I have a Chase Saver with 25k in it and that earned £92.98. 

Considering that's only a third in the Chase Saver than the ISA, I don't get why the ISA is earning not much more than half of what Chase is earning.

Was £79,767.34 the balance at the start of the latest interest period?

What period did the interest cover?

£299 seems a more likely ISA interest value but you haven't provided sufficient information yet to know if there is anything wrong or not.

Was £79,767.34 the balance at the start of the latest interest period?
No.  It was £79,767.34 minus the £266.65 I've earned this month.

What period did the interest cover?
Monthly payment

In which case the interest would have been more like £298, not £299.

Are you quite certain that the interest was due for at least 30 or 31 days on £79,500 🤔

Middle_of_the_Road

whalemoney said:

masonic said:

You will need the gross rate (not AER) to work out interest if it is being paid monthly. Then you will need the period over which interest is paid, specifically the number of days in this period. You can divide the gross rate by the number of days in the year and then multiply by the number of days in the interest period, then multiply by your starting balance (assuming no payments in or out during the period).

It looks a bit low to me, even for a 30 day month. However, I strongly suspect the reason for this is not an error by the bank.

That isn't the AER.  AER is 4.67%.  The only two interest figures on the app (Plum - absolute sh*te bank and app) are;
AER 4.67
VAR 4.05

So I went with the lower figure of the two when I posted my initial question.

Surely there's a calculator online people use that'll work it out?  Can't find any websites and losing patience.

Using the lower rate you quoted works out roughly the amount of interest you got for last month.

Looks like your bonus rate has finished.

Middle_of_the_Road

whalemoney said:

Hi I have an ISA £79,767.34 with a rate that is now currently at 4.5%.  Last months interest was £266.65.

How can I calculate if that's correct?

It doesn't seem correct as I have a Chase Saver with 25k in it and that earned £92.98. 

Considering that's only a third in the Chase Saver than the ISA, I don't get why the ISA is earning not much more than half of what Chase is earning.

This figure doesn't correspond to either of interest rates quoted in your later post. 

masonic

whalemoney said:

masonic said:

You will need the gross rate (not AER) to work out interest if it is being paid monthly. Then you will need the period over which interest is paid, specifically the number of days in this period. You can divide the gross rate by the number of days in the year and then multiply by the number of days in the interest period, then multiply by your starting balance (assuming no payments in or out during the period).

It looks a bit low to me, even for a 30 day month. However, I strongly suspect the reason for this is not an error by the bank.

That isn't the AER.  AER is 4.67%.  The only two interest figures on the app (Plum - absolute sh*te bank and app) are;
AER 4.67
VAR 4.05

So I went with the lower figure of the two when I posted my initial question.

Surely there's a calculator online people use that'll work it out?

Plum quote the AER as pretty much what you have here (they say 4.68%), but that would make the gross rate 4.58% if paid and compounded monthly, rather than 4.05%. You did not mention it was Plum in your original post, and they have lots of weird terms around payment of interest, such as that it includes a bonus that isn't paid until the end of the 12 month bonus period, that transfers in earn a different rate of interest than new money, and they recently introduced something about paying interest 2 months in arrears.* In amongst all of that complexity will be your answer.

* See https://forums.moneysavingexpert.com/discussion/comment/81055005/#Comment_81055005

whalemoney said:

Can't find any websites and losing patience.

I never would have guessed.

refluxer

AFAIK, Plum have only been offering cash ISAs in the last year or two so if you've got nearly £80k in a Plum ISA, then presumably a big proportion of that has been transferred in and Plum pay a lesser interest rate for transfers (currently 3.79%, but it's possible you may have a different rate if there are different issues or versions of this account) - could that explain the discrepancy ?