ICICI Applicants feedback required

tonygch96

ICICI - Well I have taken the plung and signed up on 5th September. However, following Martin's comments on putting it on hold. I e-mailed their customer services, they phoned me today to reassure me that all was ok and that my Login Password is on its way, they follwed this up with an e-mail. It appears there was an aricle on "Working Lunch" which I missed - What is the latest thought for Investing in this Bank? I know it is regulated by the "Financial Services" - but first hand experiences are better than waiting for the "Big Bang" and relying on the Financial Services System to bail you out! - Please post your findings, good or bad. Tony

Walletwatch

Paul_Herring wrote:

This is starting to get silly. I can't seem to get an answer out of ICICI, so I'm asking here. On 1st Aug, my initial cheque for £5 cleared into my account. During Aug I transferred some more money. At the end of the month no interest. Cue the following exchange (Me in blue, them in red)...

Anyone else had similar problems (with interest that is, not with them being less communicative than a brick wall)?

Paul

I had the same problem, and I was told in some cases, I'd only get the interest w.e.f. the first completed month-end, but it'd be for the complete month, plus for the residual period of the earlier month as well. I did not investigate much further, as I got my interest in the second month (August end)

Paul_Herring

Walletwatch wrote:

Paul

I had the same problem, and I was told in some cases, I'd only get the interest w.e.f. the first completed month-end, but it'd be for the complete month, plus for the residual period of the earlier month as well. I did not investigate much further, as I got my interest in the second month (August end)

So the interest from the first (partial) month isn't compounded in the second month? Sorta makes a nonsense of the AER then?

Walletwatch

Agreed - did not take it up very seriously, as my principal amount for the first incomplete month was a princely sum of £5 ;-)

quickquid

Quote from interview between Working Lunch and ICICI:

Asked about how long the bank would offer such a high rate, ICICI UK's managing director, Sonjoy Chatterjee told Working Lunch that "we're probably talking months rather than years."

Cost cutter
Mr Chatterjee said the company keeps its costs down by basing all its operations in low-cost Mumbai, claiming "technology costs are around a tenth of the global bank's."

masonic

quickquid wrote:

Mr Chatterjee said the company keeps its costs down by basing all its operations in low-cost Mumbai, claiming "technology costs are around a tenth of the global bank's."

Just goes to show you get what you pay for! :rotfl:

Alfie_E

Paul_Herring wrote:

So the interest from the first (partial) month isn't compounded in the second month? Sorta makes a nonsense of the AER then?

Don’t worry, interest is calculated daily. The formula is the same, whether you’re calculating interest over a month, a year, or even one and a half months. It covers each day since interest was last added to the account. That does, of course, assume they apply the calculations correctly.

Alfie_E

masonic wrote:

Just goes to show you get what you pay for! :rotfl:

A Mumbai resident with a notepad and pencil? I wouldn’t be surprised, if someone were to tell me that the passwords that people have been having difficulty receiving are, in fact, being prepared in Mumbai and airfreighted over en bloc.

Paul_Herring

Alfie_E wrote:

Don’t worry, interest is calculated daily. The formula is the same, whether you’re calculating interest over a month, a year, or even one and a half months. It covers each day since interest was last added to the account. That does, of course, assume they apply the calculations correctly.

The formula may be the same, but the AER isn't since the interest that wasn't paid in the first month isn't earning interest in the second month. The AER assumes that the first month's interest is earning interest from the beginning of month 2. Ok, it only amounts to 20p on a principle of 10K, but that's not the point:

[HTML]AER: 5.40%
Interent rate: 0.4392%
Principle: £10,000.00

Amount Interest Amount Interest
01-Aug £10,000.00 £43.92 £10,000.00 £43.92
01-Sep £10,043.92 £44.12 £10,000.00 £43.92
01-Oct £10,088.04 £44.31 £10,087.84 £44.31
01-Nov £10,132.35 £44.50 £10,132.15 £44.50
01-Dec £10,176.85 £44.70 £10,176.65 £44.70
01-Jan £10,221.55 £44.90 £10,221.35 £44.90
01-Feb £10,266.45 £45.09 £10,266.25 £45.09
01-Mar £10,311.54 £45.29 £10,311.34 £45.29
01-Apr £10,356.83 £45.49 £10,356.63 £45.49
01-May £10,402.32 £45.69 £10,402.12 £45.69
01-Jun £10,448.01 £45.89 £10,447.81 £45.89
01-Jul £10,493.90 £46.09 £10,493.70 £46.09
01-Aug £10,539.99 £10,539.79
[/HTML]

DocProc

Thank you for that, Paul. Kinda interesting.

By the way, your calculations are for 'gross' interest. Isn't there a 20% Tax deduction to 'net' them down?

The basic point you make that "interest that wasn't paid in the first month isn't earning interest in the second month" still fundamentally applies though. And YES! It is important.

If you scale up the figures for someone putting in say, £100k, mid-way into the month, like now (15th of the month), then the amount of net interest missed for those 15 days to be added into the following month is:

((100,000 x 0.054 x 0.8) / 365) x 15days = £177.54 net of tax

An amount that would take a couple of people out to dinner a few times - including wine