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  • FIRST POST
    • Terry Towelling
    • By Terry Towelling 12th May 18, 4:46 PM
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    Terry Towelling
    Natwest interest rate error
    • #1
    • 12th May 18, 4:46 PM
    Natwest interest rate error 12th May 18 at 4:46 PM
    Anyone out there got a Savings Builder account with NatWest? They've just changed the way they pay their tiered rates. Up to 5K saved and you get 1.5% in any month you grow your balance by 50 or more. They used to pay interest in two parts, 0.1% regardless of whether you paid in that month and a bonus of 1.4% if your balance grew by 100. They now just make 1 payment but have forgotten to set it at the right level. They are just paying the 1.4% bonus amount. Someone has forgotten to change the programming when they changed the way the account works. I have complained and been fobbed off and so complained again. I advise you to check the amount you've been paid - and don't complain by phone unless you get inclusive minutes because call costs just have the effect of reducing your return even further - unless you ask for compo. Complaining using the online form also means that they get more time to understand what you are telling them rather than putting them on the spot and turning them all 'defensive'.
Page 2
    • Terry Towelling
    • By Terry Towelling 16th May 18, 8:07 PM
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    Terry Towelling
    As a matter of interest which two days are you discounting? 28th and 29th April presumably.
    • RG2015
    • By RG2015 16th May 18, 10:15 PM
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    RG2015
    As a matter of interest which two days are you discounting? 28th and 29th April presumably.
    Originally posted by Terry Towelling
    No. I believe that May will be 31 days from 1st May to 31st May as per my earlier post

    I have been monitoring this on a spreadsheet since I opened the account in 2016 and the interest has always been calculated up to the day before the 1st business day. There was one occasion though when they made a mistake but they corrected it within a few days.

    What I do not know is how the new Ts&Cs from April are going to change this.
    • Terry Towelling
    • By Terry Towelling 17th May 18, 2:36 PM
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    Terry Towelling
    Nwb reply
    Well, RG, two years monitoring has not been wasted. The current cycle for interest payments in early June will indeed be 31 days long. NWB has confirmed what it does and it bears no relation to their published information.

    The interest-cycle works thus:-

    The end of the calculation-cycle will be the last day of the month unless that day is Fri/Sat/Sun in which case the last day will be the next working day. The next monthly cycle starts the day after that.

    I've emphasised the word 'working' because that is the only point in the process where NWB has stated it to have any relevance in the calculation cycle. So, if the last day of the month were a bk hol Monday, that would still be the end of the cycle - unless they have got that wrong too.

    In other words all the guff about the cycle running from COB on 2nd last BD to COB on 2nd last BD is not correct. Because I'm not allowed to post links you can find this piece of incorrect info under Point 6 (bullet 1) of the following disabled web address:-

    https: // personal.natwest/personal/savings/savings-builder.html

    I don't think the new T&Cs will affect this unless they suddenly decide to do what they've published instead.

    However, we do now have a top-tip. Since 03/04 no interest is paid if the balance doesn't increase by 50. So anyone not intending to increase their balance or anyone having to decrease it should in fact remove everything from the account bar the minimum operating balance and stash it in an easy access account to keep earning interest. When the next interest-cycle starts simply put it all back in again and you will automatically get 1.5% (balances up to 5K) without having to add an extra 50!
    • RG2015
    • By RG2015 17th May 18, 3:56 PM
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    RG2015
    Point 6 (bullet 1) states:

    To earn interest each month, your balance must grow by at least 50. Our monthly interest cycle runs from close of business on the second-last business day of one month, to close of business on the second-last business day of the following month.

    This does not mention the interest calculation period, only the day by which the balance has to have increased by 50.

    I have observed that the interest calculation period runs from the 1st business day of the month until the day before the 1st business day of the following month.

    To earn interest for the month of May, the balance on Wednesday 30th May must be at least 50 greater than the balance on Friday 27th April.

    If the balance on 27th April was 4,950 and 50 was added on 30th May the interest earned will be 6.31 calculated as follows:

    4,950 x 1.50% x 29/365 = 5.90
    plus the extra 2 days when the balance is 5,000 which is 5,000 x 1.50% x 2/365 = 0.41

    PS: I am ignoring any interest earned on the interest paid on 1st May which may add one penny on a balance of approx 5,000.

    You say this bears no relation to their published information but my view is that it is open to interpretation. You interpret it one way and I interpret it differently. I would also admit that my interpretation may have been influenced by observing what NatWest actually did in practice.
    • Terry Towelling
    • By Terry Towelling 17th May 18, 5:02 PM
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    Terry Towelling
    Interpretational differences
    I'm not sure I would ever have interpreted a sentence that starts with the words 'Our monthly interest cycle runs from...' as actually meaning 'To be eligible for interest your deposit must be made between...'. That said, when read in conjunction with the other bullet points on the NWB info page , your interpretation does begin to appear to me.


    No matter, your observation of the actual practice brought you to the correct conclusion.


    I wonder how other people would interpret NWBs wording. Perhaps I am the only soldier marching in step!
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