Tembo Daily Interest

beefturnmail

How do Tembo calculate daily interest on their cash ISA?  If I dive 4.8% by 365 and multiply that by my opening balance, I get a slightly higher figure than they I paying - the daily interest they have works out at about 4.7%.  Am I missing something?   The extra 0.1% is made up by the interest compounding?

danny13579

4.8% is the AER rate. You need to use the gross rate in your calculation which is around 4.7%.

slinger2

You'll get 4.8% over the year but the daily rate will be about 4.7/365 to take account of compounding. It's the same for all accounts that pay monthly or daily.

Veteransaver

Yes because it's paid monthly the 4.8% actually works out at about 4.7%. Divide that by 365 and it should be pretty close