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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 1
    • ctdctd
    • By ctdctd 12th May 18, 5:26 PM
    • 880 Posts
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    ctdctd
    • #2
    • 12th May 18, 5:26 PM
    • #2
    • 12th May 18, 5:26 PM
    They have done similar before and the extra was added a few weeks later IIRC

    I agree that it seemed to be only 1.4% last month.
    March, I got 1.84 but April only 1.67 despite an extra 50.
    That's too low even allowing for April only being a 30 day month.

    Ah, thanks AirlieBird - hadn't seen the earlier thread.
    Makes sense - probably!
    Last edited by ctdctd; 12-05-2018 at 5:51 PM.
    Do Money Saving sites make you buy more bargains - and spend more money?
    • AirlieBird
    • By AirlieBird 12th May 18, 5:34 PM
    • 1,020 Posts
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    AirlieBird
    • #3
    • 12th May 18, 5:34 PM
    • #3
    • 12th May 18, 5:34 PM
    Thread explaining it here
    forums.moneysavingexpert.com/showthread.php?t=5837535
    Did you really mean to put loose?
    Lose: no longer possess, not to retain, unable to find
    Loose: not firmly or tightly fixed in place
    • Terry Towelling
    • By Terry Towelling 12th May 18, 7:54 PM
    • 34 Posts
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    Terry Towelling
    • #4
    • 12th May 18, 7:54 PM
    Oh heck
    • #4
    • 12th May 18, 7:54 PM
    Thanks for the redirect to the earlier thread. I had completely overlooked the fact that their statement month runs from 2nd last BD to 2nd last BD. So, yes, only 28 days worth of interest. Just done my sums again (more complex with 3 different pay-ins throughout the month and not knowing whether you get interest for the day you pay in or from the next day onwards) and it still doesn't work out right. Looks like I've got 5p too much! Whoo Hoo! Anyway, they now pay no interest if you don't increase your balance by 50+. It is therefore even more important, when withdrawing or not reaching the 50 limit, that you remove it all and stick it in some other interest-paying account for that month and then pay it all back in next month. Looks like I'm eating humble pie in my next missive to NatWest.
    • Terry Towelling
    • By Terry Towelling 12th May 18, 8:17 PM
    • 34 Posts
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    Terry Towelling
    • #5
    • 12th May 18, 8:17 PM
    Oh heck - even more so
    • #5
    • 12th May 18, 8:17 PM
    I'm really losing the plot here. Someone please help. Interest payments in May related to the period from 2nd last BD in March (i.e. 28/03 as 30/03 was a bank hol) to 2nd last BD in April (i.e. 27/04). If both end dates are included in the calculation that is 30 days - not 28. So they have short-changed us all - haven't they?
    • RG2015
    • By RG2015 12th May 18, 11:11 PM
    • 1,219 Posts
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    RG2015
    • #6
    • 12th May 18, 11:11 PM
    • #6
    • 12th May 18, 11:11 PM
    The 2nd last day is not the interest calculation day, but only the day by which the balance needs to have been increased by at least 50.

    The interest calculation day for March was Monday 2nd April (Easter Monday) hence 2 days of April were included in the interest payment made on Tuesday 3rd April.

    The interest calculation day for April was Monday 30th April and since 2 days of April had already been paid the April calculation was only for 28 days. If you check your March payment you should find that the interest has an extra two days in the calculation (33 days instead of 31 days).

    Since 1.50% x 28 / 30 = 1.40%, it could be inferred that the previous second entry of 0.10% had been overlooked by NatWest. They have messed up in the past but on this occasion they have calculated the interest correctly.
    • Terry Towelling
    • By Terry Towelling 13th May 18, 9:34 PM
    • 34 Posts
    • 9 Thanks
    Terry Towelling
    • #7
    • 13th May 18, 9:34 PM
    • #7
    • 13th May 18, 9:34 PM
    Thanks RG2015. Looks like I was working on an incorrect premise to begin with and then moved to another incorrect premise.


    My original premise was:-


    1. Increase your balance by 28th and that increase will be used in the interest calculation for that calendar month.


    2. Interest will be paid on 1st working day of the next month for interest that accrued only during the previous calendar month - e.g. 28 (29 leap year), 30 or 31 days.


    3. If 1st working day happens to be 3rd, the interest paid on that day will still only relate to the days of the previous calendar month.


    What you seem to be saying is that if interest is paid on 3rd of the month it also includes amounts accrued for 1st and 2nd of that month. So interest is calculated on the number of days between interest payment dates and has nothing to do with calendar months. Have I got that right? If so, it seems a bit daft to me - but, I guess that's just me.
    • RG2015
    • By RG2015 13th May 18, 10:34 PM
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    RG2015
    • #8
    • 13th May 18, 10:34 PM
    • #8
    • 13th May 18, 10:34 PM
    Interest is calculated from the first working day of the month to the day before the first working day of the next month.

    For March 2018 this is from Thursday 1st March to Monday 2nd April (Easter Monday) and is 33 days.

    For April 2018 this is from Tuesday 3rd April to Monday 30th April and is 28 days.

    For May 2018 this is from Tuesday 1st May to Thursday 31st May and is 31 days (Yea!).

    If it wasn't for bank holidays and weekends it would always be like May 2018, with the correct number of days.

    It's easy when you think about it. Yeah Right!
    • Terry Towelling
    • By Terry Towelling 14th May 18, 8:45 PM
    • 34 Posts
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    Terry Towelling
    • #9
    • 14th May 18, 8:45 PM
    My head hurts but...
    • #9
    • 14th May 18, 8:45 PM
    Have investigated further and also asked NWB for clarity. They will get back to me. However, their T&Cs don't back up the 28 day argument. They clearly state that their interest-calculation period runs from Close of Business (COB) on the 2nd last BD of the month to COB on the 2nd last BD of the following month. Interest so calculated will then be paid on the 1st BD of the next month and be available on the following day. So interest paid in May relates to the period from COB on 28/03 (30/03 being a Bank Hol) to COB on 27/04 - which is 30 days. So NWB has got it wrong and we have all been short-changed. So let's wait and see what they actually come back with.
    • RG2015
    • By RG2015 14th May 18, 11:06 PM
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    RG2015
    You may be right about the interest calculation period but were you paid for 33 days in March?
    • Terry Towelling
    • By Terry Towelling 15th May 18, 11:51 AM
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    Terry Towelling
    I believe I was - which means that what NWB has published as their calculation period and how they pay the result of this calculation is not correct. The wording in their leaflet is quite unequivocal about the period for the calculation and equally so about the date when they will pay the result of that calculation. It makes no mention of including the extra days between the end of the calculation period and the payment date and leads one to believe that those days will form part of the next month's calculation. I wonder what they will say about that - or if they even care.
    • RG2015
    • By RG2015 15th May 18, 12:08 PM
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    RG2015
    I have not been able to find any mention of the calculation period. Are you able to post a link to this?

    All I have seen is this, which makes no mention of the calculation period only the period for adding the 50.

    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
    • RG2015
    • By RG2015 15th May 18, 12:15 PM
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    RG2015
    I have also seen the following which I took to mean that the interest was calculated up to the day before the first business day

    Interest is calculated daily and paid on the first business day of the month and at account closure. You will be able to see and access the interest in your account on the following day.
    • AirlieBird
    • By AirlieBird 15th May 18, 12:31 PM
    • 1,020 Posts
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    AirlieBird
    For the period between the close of business on the second last business day of the month and the first business day of the following month, how do they know what interest rate to pay? The monthly interest period for which those days fall in is ongoing. Surely the interest payment period should align with the period for which the conditions for the applicable interest rate is calculated?

    I thought this account was convoluted enough, but it seems it is even more convoluted. It should be a case study for how not to design a savings product. So glad I have no need for this account.
    Did you really mean to put loose?
    Lose: no longer possess, not to retain, unable to find
    Loose: not firmly or tightly fixed in place
    • RG2015
    • By RG2015 15th May 18, 12:46 PM
    • 1,219 Posts
    • 711 Thanks
    RG2015
    I thought this account was convoluted enough, but it seems it is even more convoluted. It should be a case study for how not to design a savings product. So glad I have no need for this account.
    Originally posted by AirlieBird
    Can't argue that the conditions are crazy but 1.50% is the best instant access rate available.

    I assume from your statement that you have no cash deposits earning less than 1.50%.
    • Terry Towelling
    • By Terry Towelling 15th May 18, 7:57 PM
    • 34 Posts
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    Terry Towelling
    As a new user to the forum I am apparently not allowed to post links. However, what you have quoted (RG) is what I am referring to. I.E. 'The monthly interest cycle runs from ...'. What this means to me is that for every day during the interest cycle 1 day's interest is calculated. At the end of the cycle all of those values are totted up and then paid out on the 1st BD of the following month. Anything after the end of one month's cycle forms part of the next monthly cycle (if you'll pardon the expression). Having said all that, it is true (as you say RG) that I received 33 days interest in April when the interest cycle was only 29 days long. I'm just going to wait and see what NWB comes up with because it is clear to me that they are doing something different to what they have published.
    • Terry Towelling
    • By Terry Towelling 15th May 18, 9:12 PM
    • 34 Posts
    • 9 Thanks
    Terry Towelling
    LIGHTBULB MONENT!!


    May have cracked it. NWB changed the terms of the savings builder account on 3/4. So, my guess is that they extended their interest cycle for the April interest calculation from the published 29 days to take it up to the end of the old T&Cs at COB on 2/4. This would make it 33 days long. Thus the next interest cycle for payments in May ended up shorter as it didn't start until 3/4 in line with the new T&Cs. This means that from next month onward we should all be able to rely on the interest cycle being as stated and interest payments made will only relate to interest calculated during that cycle. Phew! I'll still wait until NWB confirms this before letting them off the hook. Thanks to everyone for all the views and opinions though.
    • RG2015
    • By RG2015 15th May 18, 10:28 PM
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    RG2015
    This means that from next month onward we should all be able to rely on the interest cycle being as stated and interest payments made will only relate to interest calculated during that cycle.
    Originally posted by Terry Towelling
    Can you confirm the dates and number of days you are expecting in next month's cycle please.
    • Terry Towelling
    • By Terry Towelling 16th May 18, 2:44 PM
    • 34 Posts
    • 9 Thanks
    Terry Towelling
    NWB June Interest
    I can give it a go.


    2nd last BD in April is 27th. So the interest-calculation-cycle starts (and includes) 28th. The end of the cycle will be COB on 30th May. So the period will be 28/4 to 30/5 inclusive and amounts to 33 days. The interest will be credited to my account on Friday 1/6 and available from Saturday 2/6.


    The only difficulty calculating the value of the interest comes if your credits fall near the ends of the cycle because NWB also says that COB is different for in-branch, online and postal - but they don't say how they differ. If you pay in away from the extremities it's an easy calculation.


    If your balance is under 5K and you pay in 50 in one lump and do it on day 1 of the cycle you'll get 1.5% of the opening balance + about 6p or 7p. That's the most you would expect. The least would be a mere fraction over 1.5% of the opening balance if you paid once in at the end of the cycle.


    The suspense is killing me; I can hardly wait until 1/6! Hmmm
    • RG2015
    • By RG2015 16th May 18, 3:42 PM
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    RG2015
    Okay thanks.

    I agree with you calculations for 33 days and the payment date of 1st June

    However, I am expecting 31 days so let's see what happens on 1st June which probably won't be visible online until 2nd June.
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