Natwest E-isa interest

DJSKYLINE

Hi

Im looking at the Natwest e-ISA b/c the interest is paid montly. It says this as the rates

Balance £1
AER 5.50%
Gross 5.37%
Net n/a
So does this mean each month my interest will be 5.37% of my current balance?

Thanks

YorkshireBoy

No. Assuming a static balance, your interest each month will be:

Balance x 5.37% / 365 x n

where n = no of days in the month.


If the balance is not static, your interest will be calculated each day as:

Balance x 5.37% / 365

...and then you will receive the total of 28/29/30/31 days' interest as appropriate.

DJSKYLINE

ok,so say it was £1200

the first interest after 1st month (say for april) will be?:

£1200 x 5.37% / 365*31 = £0.00569

less than a penny? or is my calculation wrong?

mountainchrisriver

Think I make it ... £5.47

DJSKYLINE

with my calculation?

YorkshireBoy

Aren't there only 30 days in April?

Ergo, the answer is £5.29

DJSKYLINE

lol yes my mistake. i still dont get that answer though. can you tell me the steps u did and the numbers.

DJSKYLINE

i know why. I did this in brackets

Balance x 5.37% / (365 x n) whereas it should be (Balance x 5.37% / 365) x n

Thank You

sloughflint

DJSKYLINE wrote: »

ok,so say it was £1200

the first interest after 1st month (say for april) will be?:

£1200 x 5.37% / 365*31 = £0.00569

less than a penny? or is my calculation wrong?

I think you were maybe dividing by 31 ( or should be 30) rather than multiplying to get such a small number.
Otherwise your calculation looks ok.
£5.29

DJSKYLINE

^^ i corrected it

sloughflint

1200*(0.0537/365)*30