Banks that round balances

Milarky

Just a note (or reminder) that Nationwide BS only pays interest on balances rounded to whole pounds (can't find where I read it now, isn't that annoying?)

Small though the effect is, it is good practice to systematically round balances on one's accounts whenever practical - I've been doing this for years since discovering that they can 'give change' when paying in across the counter. Another reason for rounding balances is it makes adding them up a bit easier/quicker.

Has anyone spotted any other institutions employing this approach?

Paul_Herring

Milarky wrote: »

it is good practice to systematically round balances on one's accounts whenever practical

I've never found it practical. More so given the number of accounts I hold.

nicko33

Paul_Herring wrote: »

I've never found it practical. More so given the number of accounts I hold.

Surely the more accounts you have, the more you stand to lose (even if it is only pennies)

debbie42

YBS has a charity scheme whereby any pence on your interest are donated to charity. I signed up for that one. It's no great shakes for me, but I imagine it mounts up across their customer base.

bristolleedsfan

debbie42 wrote: »

YBS has a charity scheme whereby any pence on your interest are donated to charity. I signed up for that one. It's no great shakes for me, but I imagine it mounts up across their customer base.

Leeds BS have started the same thing this year as well, personally I believe that its a cheek that people have to "opt out" of the scheme. I told Yorkshire BS that if i wanted less interest I would have gone elsewhere.

Salary and Pay increase for Mr Cornish puts things into some perspective.

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=437956&in_page_id=3

http://www.thisismoney.co.uk/saving-and-banking/article.html?in_article_id=434332&in_page_id=7

debbie42

It was ages ago that I joined, but I do remember being fully informed of the charitable donation issue and I specifically chose to donate it. As I said, I am happy to donate the 99p maximum each year to their charity, regardless of what the directors may earn.

What concerns me far more is the interest rates that they have on their products. I'm moving my cash ISA away as it isn't competitive at the moment.

Paul_Herring

nicko33 wrote: »

Surely the more accounts you have, the more you stand to lose (even if it is only pennies)

Assuming the Nationwide interest model (and not all banks do this anyway,) on average I'm losing interest on 50p per account.

Interest on 50p in a 6% account works out at 3 pence (minus tax, but say 3p) per account per year.

Time spent faffing around ensuring each account has an even number of pounds in it is nowhere near worth 3p/account/year.

While I usually enjoy messing around with MS Money and balancing accounts/checking future cash flow, setting up standing orders or direct debits for £xxx.42 for the sake of a fraction of 3p seems to be taking it a little too far.

Milarky

Paul_Herring wrote: »

Assuming the Nationwide interest model (and not all banks do this anyway,) on average I'm losing interest on 50p per account.

Interest on 50p in a 6% account works out at 3 pence (minus tax, but say 3p) per account per year.

Time spent faffing around ensuring each account has an even number of pounds in it is nowhere near worth 3p/account/year.

Agreed, but primarily I just wanted to know what the practices are out there among the banks. And I think you'd find it became second nature - if not compulsive- to round all balances after a while.I just find pennies untidy.

Finally, think why NW (or others) do this. With maybe 20 million accounts - that's interest on £20 million they save (seen 'Office Space'?) - or maybe £10 million as you argue. But it all adds up - £600,000 - probably 25 staff or one large executive.

bristolleedsfan

debbie42 wrote: »

I specifically chose to donate it. .

The last Yorkshire BS account that I opened i found the charity pennies thing had been deducted from my interest. When i questioned why it was deducted being as I hadnt agreed to join the scheme I was informed that I hadnt opted out of the scheme.

Its the same as marketing material with most the larger Building Societies people actually have to "opt out" of receiving the marketing material.

Possibly u had the charity thing explained to u and u said fine so u were left as having opted in.

nicko33

Paul_Herring wrote: »

Interest on 50p in a 6% account works out at 3 pence (minus tax, but say 3p) per account per year.
...
setting up standing orders or direct debits for £xxx.42 for the sake of a fraction of 3p seems to be taking it a little too far.

maybe 3p per account per month if the balance is rounded when interest is paid monthly
...
I think I agree, but either way I'd prefer to know if they do it

Paul_Herring

nicko33 wrote: »

maybe 3p per account per month if the balance is rounded when interest is paid monthly

What account do you have that pays 72%?