New Egg Account offer

nrsql

Think it's just a mistake.
Should be 6.3% AER accrued daily.
or
6.11% gross compounded daily
or
6.11% gross compounded daily, 6.3% AER

oldfella

so who is going to request their 6.3% compounded daily - has to be someone who has already received their interest

Dagobert - do you want to ?

Milarky

Dagobert wrote: »

I have to disagree with you there.

Following rb10's post, I calculated my interest on a daily compounding basis, applying 6.11%. (An AER of 6.3% means 6.11% gross interest if compounding daily.) This calculation gave me £971.15 interest, which is virtually exactly what I received.

Of course, this is no proof as such but it is so close that I am convinced that Egg indeed compound interest an a daily basis.

OK, I've just done the same for my interest payout - using 6.11%/365 as the daily interest compound rate - and the results came out as

estimated interest £1150.09
actual interest paid £1149.55

which more or less clinches this argument - Egg does compound interest daily as claimed. Glad we got there in the end.

nrsql

Milarky wrote: »

OK, I've just done the same for my interest payout - using 6.11%/365 as the daily interest compound rate - and the results came out as

estimated interest £1150.09
actual interest paid £1149.55

which more or less clinches this argument - Egg does compound interest daily as claimed. Glad we got there in the end.

Was that ever in doubt?
The question is whether the the rate is 6.3% as stated or 6.11% as calculated taking 6.3% as apr.

Hope we get there in the end.

rb10

nrsql wrote: »

Was that ever in doubt?
The question is whether the the rate is 6.3% as stated or 6.11% as calculated taking 6.3% as apr.

Hope we get there in the end.

From the experiences of Dagobert and Milarky it would appear that their actual gross rate that they pay is 6.11%.

It does seem odd that they do not have to advertise this as 6.11% gross / 6.3% AER.

Dagobert

Milarky wrote: »

OK, I've just done the same for my interest payout - using 6.11%/365

The formula for daily compound interest is not x%/365 but

C * (1+p/365)^t - C

where

• C balance
• t number of days (at that balance)
• p gross interest rate

For the next group of days C will have to be increased by the interest just calculated.