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  • FIRST POST
    • aj23
    • By aj23 11th Jul 18, 10:20 AM
    • 713Posts
    • 243Thanks
    aj23
    Chip 3% App
    • #1
    • 11th Jul 18, 10:20 AM
    Chip 3% App 11th Jul 18 at 10:20 AM
    How does this actually work? So you can put up to 10k in it, but can only save manually up to 100 a day, six times a month, so 600 a month. That's 7200k over 12 months, after which is goes back to 0% ?

    It says interest is paid quarterly, so I'm assuming you get a payout of 3% on what you have saved into each three month period?

    1800: 54
    3654: 109.62
    5583.62: 167.50
    7551.12: 226.53

    Giving you a balance of 7777.65 at the end of 12 months

    Sounds too good to be true? Or does it work like a regular saver in which you get 3% on the average balance?
    Last edited by aj23; 11-07-2018 at 11:55 AM.
Page 2
    • aj23
    • By aj23 12th Jul 18, 10:19 AM
    • 713 Posts
    • 243 Thanks
    aj23
    Regular savers don't pay interest on the average balance. They pay whatever the rate is on all the money in the account, calculated daily. This is not the average balance, and it is the way all simple interest works, whether it is a regular saver, easy access account, notice account, fixed rate savings bond, or current account.
    Originally posted by ValiantSon
    Nope, not for a Regular Saver.

    "Mr Matt Mattics and his 3,000 savings

    Matt has saved a total of 3,000 in a regular savings account paying 10% interest over a year.

    What Matt expects to earn? His simple sum works out that he's put 3,000 in at 10% therefore he should earn 300 in interest.

    Why is this wrong? Matt only had 3,000 in there for the last month; it took a year to build up to that amount. You only earn interest on money in the account. So after the first month he was earning the 10% on just 250, half way through the year he was earning it on 1,500.

    How Matt should work it out? Over the year, his average balance was roughly half the 3,000, in other words 1,500... so Matt should expect to earn around 10% of 1,500 over the year, which is 150."
    • karlie88
    • By karlie88 12th Jul 18, 11:08 AM
    • 8,477 Posts
    • 106,328 Thanks
    karlie88
    Have to say that I do enjoy aj23's threads - they make me

    Particularly how he tries to educate other MSE users when it comes to earning interest on various savings accounts.

    Oh the irony!

    Re: Chip 3% app. Concentrate on filling up your Tesco Bank current account rather than trying to decipher the intricate nature of Chip's 3% app.
    Official MSE canny forumite and HUKD VIP badge member
    • aj23
    • By aj23 12th Jul 18, 11:25 AM
    • 713 Posts
    • 243 Thanks
    aj23
    Have to say that I do enjoy aj23's threads - they make me

    Particularly how he tries to educate other MSE users when it comes to earning interest on various savings accounts.

    Oh the irony!

    Re: Chip 3% app. Concentrate on filling up your Tesco Bank current account rather than trying to decipher the intricate nature of Chip's 3% app.
    Originally posted by karlie88
    It flatters me that I'm in your thoughts enough to check if I post to be honest! I believe my OP was asking for clarity, not to educate. Maybe all of the have made you light headed.

    But thanks for your humorous yet pointless contribution which hasn't added anything at all. I'm sure we are all grateful. Though it is a bit creepy that you remember by personal banking. Again, surprised you think about me that much...
    Last edited by aj23; 12-07-2018 at 11:57 AM.
    • ValiantSon
    • By ValiantSon 12th Jul 18, 11:32 AM
    • 2,537 Posts
    • 2,509 Thanks
    ValiantSon
    Nope, not for a Regular Saver.

    "Mr Matt Mattics and his 3,000 savings

    Matt has saved a total of 3,000 in a regular savings account paying 10% interest over a year.

    What Matt expects to earn? His simple sum works out that he's put 3,000 in at 10% therefore he should earn 300 in interest.

    Why is this wrong? Matt only had 3,000 in there for the last month; it took a year to build up to that amount. You only earn interest on money in the account. So after the first month he was earning the 10% on just 250, half way through the year he was earning it on 1,500.

    How Matt should work it out? Over the year, his average balance was roughly half the 3,000, in other words 1,500... so Matt should expect to earn around 10% of 1,500 over the year, which is 150."
    Originally posted by aj23
    Yet another instance of you not understanding interest. The MSE guide that you quoted contains a very important qualification, which you have ignored: the word, "roughly". What I have said is absolutely correct.

    The MSE guide is intended to show, in simple terms, what is going on, but in reducing it to simple terms, it also becomes a little misleading. Interest is not paid on the average balance!
    • aj23
    • By aj23 12th Jul 18, 11:53 AM
    • 713 Posts
    • 243 Thanks
    aj23
    Yet another instance of you not understanding interest. The MSE guide that you quoted contains a very important qualification, which you have ignored: the word, "roughly". What I have said is absolutely correct.

    The MSE guide is intended to show, in simple terms, what is going on, but in reducing it to simple terms, it also becomes a little misleading. Interest is not paid on the average balance!
    Originally posted by ValiantSon
    You: "Regular savers don't pay interest on the average balance."

    MSE: "How Matt should work it out? Over the year, his average balance was roughly half the 3,000, in other words 1,500... so Matt should expect to earn around 10% of 1,500 over the year, which is 150."

    This is far from you being 'absolutely correct' LOL

    Spin it how you like, you're still wrong. The use of 'roughly' is superfluous to your argument because it's obvious according to when in the month you deposit if it varies. Either way, interest is paid on the average balance of the term, not the max balance. Just accept it. You two are always gunning for an argument.
    Last edited by aj23; 12-07-2018 at 12:00 PM.
    • youngretired
    • By youngretired 12th Jul 18, 12:57 PM
    • 230 Posts
    • 124 Thanks
    youngretired
    The total amount that you can manually save a year is 7200 but if you use the auto-saves then this can be higher re MSE & Chips FAQs

    How does it work? It analyses your income and spending, then every four to seven days calculates what you can afford to save, and uses a direct debit to move that to a separate 'savings' account. The money normally amounts to about 10-25 five times monthly; the max is 100 (so 500/mth).

    You can also manually move a max 100/day up to six times a month, tell it to save more or less and pause automatic saving.
    • Paul_DNAP
    • By Paul_DNAP 12th Jul 18, 1:22 PM
    • 256 Posts
    • 324 Thanks
    Paul_DNAP
    You: "Regular savers don't pay interest on the average balance."

    MSE: "How Matt should work it out? Over the year, his average balance was roughly half the 3,000, in other words 1,500... so Matt should expect to earn around 10% of 1,500 over the year, which is 150."

    This is far from you being 'absolutely correct' LOL

    Spin it how you like, you're still wrong. The use of 'roughly' is superfluous to your argument because it's obvious according to when in the month you deposit if it varies. Either way, interest is paid on the average balance of the term, not the max balance. Just accept it. You two are always gunning for an argument.
    Originally posted by aj23

    No, he's correct. The "average balance" thing in the regular saver guide on this website is a rough guide to explain why the interest payment isn't 3% of the final balance due to the balance being built up in instalments through the time, as that is a question MSE Martin is often asked.


    It is not, however, describing how the bank will calculate the interest payment for the account, that is done on a daily basis based on the balance at the end of the day (some do it weekly) and then that is added up and credited to the account at the advertised interval (monthly, quarterly, yearly etc.) where it then becomes part of the total balance and can begin to compound. (The daily rate will be adjusted downwards to allow for the compounding effect to take it to 3% APR).


    So the interest calculation is a lot more complex than your "take 3% of the average balance" as it depends on the date of account opening, the interest credit interval, and the exact timing of any deposit and withdrawal from the account.


    BUT as a rough guide to your expected first year return, you could use that approach, if the deposits are regular and the interest is annual.
    (Although I could be wrong, I often am.)
    • ValiantSon
    • By ValiantSon 12th Jul 18, 3:02 PM
    • 2,537 Posts
    • 2,509 Thanks
    ValiantSon
    You: "Regular savers don't pay interest on the average balance."

    MSE: "How Matt should work it out? Over the year, his average balance was roughly half the 3,000, in other words 1,500... so Matt should expect to earn around 10% of 1,500 over the year, which is 150."

    This is far from you being 'absolutely correct' LOL

    Spin it how you like, you're still wrong. The use of 'roughly' is superfluous to your argument because it's obvious according to when in the month you deposit if it varies. Either way, interest is paid on the average balance of the term, not the max balance. Just accept it. You two are always gunning for an argument.
    Originally posted by aj23


    There really is no point with you, is there?

    When numerous people repeatedly correct you about interest calculation, it is worth asking yourself whether all of these experienced people are wrong and you alone are right, or whether the reverse may be true.

    No, I am not wrong. I give up, however, because you never ever listen.
    Last edited by ValiantSon; 12-07-2018 at 3:05 PM.
    • aj23
    • By aj23 12th Jul 18, 3:07 PM
    • 713 Posts
    • 243 Thanks
    aj23


    There really is no point with you, is there?

    When numerous people repeatedly correct you about interest calculation, it is worth asking yourself whether all of these experienced people are wrong and you alone are right, or whether the reverse may be true.

    No, I am not wrong. I give up, however, because you never ever listen.
    Originally posted by ValiantSon
    You're the one who commented. I didn't ask you to. in fact, I've asked you multiple times not to. You follow me about. You are always looking for a reason to argue, you just can't help yourself. This thread was constructive and helpful until you and Karlie got involved with your unwanted and unhelpful comments. You expect me to listen to you, but not you to me. You can't have it all your way. Others have contradicted you in this thread. I even quoted you against MSE and you still won't accept it or acknowledge a discrepancy in your evaluation and fall back on the use of 'roughly' as a get out clause.
    Last edited by aj23; 12-07-2018 at 3:12 PM.
    • aj23
    • By aj23 12th Jul 18, 3:09 PM
    • 713 Posts
    • 243 Thanks
    aj23
    No, he's correct. The "average balance" thing in the regular saver guide on this website is a rough guide to explain why the interest payment isn't 3% of the final balance due to the balance being built up in instalments through the time, as that is a question MSE Martin is often asked.


    It is not, however, describing how the bank will calculate the interest payment for the account, that is done on a daily basis based on the balance at the end of the day (some do it weekly) and then that is added up and credited to the account at the advertised interval (monthly, quarterly, yearly etc.) where it then becomes part of the total balance and can begin to compound. (The daily rate will be adjusted downwards to allow for the compounding effect to take it to 3% APR).


    So the interest calculation is a lot more complex than your "take 3% of the average balance" as it depends on the date of account opening, the interest credit interval, and the exact timing of any deposit and withdrawal from the account.


    BUT as a rough guide to your expected first year return, you could use that approach, if the deposits are regular and the interest is annual.
    Originally posted by Paul_DNAP
    It still works in a similar principle to how a regular saver works though, as you conclude. Someone earlier said to use the regular saver calculator to work out the interest. So I'm not wrong like ValiantSon is saying. But thanks for you helpful comments.
    Last edited by aj23; 12-07-2018 at 3:13 PM.
    • ValiantSon
    • By ValiantSon 12th Jul 18, 3:29 PM
    • 2,537 Posts
    • 2,509 Thanks
    ValiantSon
    You're the one who commented. I didn't ask you to. in fact, I've asked you multiple times not to.
    Originally posted by aj23
    You don't decide who does and doesn't post.

    You follow me about.
    Originally posted by aj23
    Don't flatter yourself. This is an internet forum where lots of people post. I happen to post in some of the same threads as you.

    You are always looking for a reason to argue, you just can't help yourself.
    Originally posted by aj23
    Whatever. You wrote something that was wrong and I posted a correction. It is you who then tried to argue about it, even though you are wrong, and have been shown to be on repeated occasions. My post was not only intended to (once again) try to explain to you how interest is calculated, but also to avoid others being mislead by your error.

    This thread was constructive and helpful until you and Karlie got involved with your unwanted and unhelpful comments.
    Originally posted by aj23
    What I wrote was completely helpful and constructive, as it was explaining how interest is actually calculated.

    You expect me to listen to you, but not you to me. You can't have it all your way.
    Originally posted by aj23
    I will gladly listen if you post something that is factually correct, but on this mater you aren't.

    Others have contradicted you in this thread.
    Originally posted by aj23
    Where?

    Nobody in this thread has disagreed with what I wrote, other than you.

    I even quoted you against MSE and you still won't accept it or acknowledge a discrepancy in your evaluation and fall back on the use of 'roughly' as a get out clause.
    Originally posted by aj23
    Please identify this apparent discrepancy.

    No, you don't seem to understand what the word, "roughly" means. It is a synonym for "approximately", so it means that the "average balance" is only an approximation of how it is calculated. I have explained how it is actually calculated. I'm not falling back on anything; not only do I understand how to calculate interest rates, I also understand the English language.
    Last edited by ValiantSon; 12-07-2018 at 3:33 PM.
    • ValiantSon
    • By ValiantSon 12th Jul 18, 3:30 PM
    • 2,537 Posts
    • 2,509 Thanks
    ValiantSon
    It still works in a similar principle to how a regular saver works though, as you conclude. Someone earlier said to use the regular saver calculator to work out the interest. So I'm not wrong like ValiantSon is saying. But thanks for you helpful comments.
    Originally posted by aj23
    Yes you are!

    Interest on regular savers is not calculated on the average balance, but is rather calculated on the money in the account each day: the two are not the same!
    • karlie88
    • By karlie88 12th Jul 18, 4:52 PM
    • 8,477 Posts
    • 106,328 Thanks
    karlie88
    you and Karlie got involved with your unwanted and unhelpful comments.
    Originally posted by aj23
    We're not the only ones though, are we?

    Post #94 onwards: https://forums.moneysavingexpert.com/showthread.php?t=5783648&page=5

    Post #37 onwards: https://forums.moneysavingexpert.com/showthread.php?t=5859048&page=2

    And more MSE users...

    Let's not forget the time you called people who check their mobile banking apps on a daily basis 'ridiculous' and 'pathetic' on this thread.

    I note that the comment has subsequently been deleted (either by you or the forum team). I guess your comment was 'unwanted and unhelpful'. Pot kettle comes to mind....
    Official MSE canny forumite and HUKD VIP badge member
    • ValiantSon
    • By ValiantSon 12th Jul 18, 5:40 PM
    • 2,537 Posts
    • 2,509 Thanks
    ValiantSon
    We're not the only ones though, are we?

    Post #94 onwards: https://forums.moneysavingexpert.com/showthread.php?t=5783648&page=5

    Post #37 onwards: https://forums.moneysavingexpert.com/showthread.php?t=5859048&page=2

    And more MSE users...

    Let's not forget the time you called people who check their mobile banking apps on a daily basis 'ridiculous' and 'pathetic' on this thread.

    I note that the comment has subsequently been deleted (either by you or the forum team). I guess your comment was 'unwanted and unhelpful'. Pot kettle comes to mind....
    Originally posted by karlie88
    And there are lots more examples to add to that. I started compiling a list and then thought better of it. Anyone who is interested can simply search their post history.
    • burnoutbabe
    • By burnoutbabe 16th Jul 18, 12:49 PM
    • 1,300 Posts
    • 1,861 Thanks
    burnoutbabe
    I used chip for a while and then when its link with barclays online banking stopped working (and refused to accept the details again) I said i'd best close it.
    And now realise i have no details of what interest was earned in that time, as they don't issue any statements and the app is now inactive.

    So that is a bit frustrating, I'm having to chase them to tell me what interest, if any, was earned in the 6 months i had it open.

    NB: in fact if you close your account you lose any interest accrued but not yet paid.
    Last edited by burnoutbabe; 16-07-2018 at 4:12 PM.
    • bowlhead99
    • By bowlhead99 16th Jul 18, 2:50 PM
    • 8,235 Posts
    • 15,018 Thanks
    bowlhead99
    Yes you are!

    Interest on regular savers is not calculated on the average balance, but is rather calculated on the money in the account each day: the two are not the same!
    Originally posted by ValiantSon
    But the average amount of money in the account over an interest period is calculated by reference to your data, which is, the money in the account each day. So if you know the weighted average balance that will be in the account, and the annual interest rate applied to such amounts, you can multiply them out and see how much you'll get.

    For a given interest calculation period, you are saying that they look at the balance at the end of each day and calculate interest on it and then add up the chunks of interest to get the total interest to pay. I wouldn't disagree with that, as it's a practical way to do it and banks need to know their daily exposure. But it's effectively the same number as you would get by looking, after the fact, at the average balance held for the relevant interest calculation period, and multiplying that average balance for the period by the rate for the period to get the amount which should be accrued.

    It's true that the MSE method is just a simplistic shortcut. If the method of calculation were to look at a more complex set of circumstances it could still work to the nearest few pence; you just have to perform the "average" calculation at a nice granular level of detail to be able to feed it the inputs.

    For example, they have Mr Matt Mattics where his "average balance was roughly half the 3,000, in other words 1,500... so Matt should expect to earn around 10% of 1,500"...

    Instead, they could have an example customer Mr Arif Metic where his average balance was , not roughly but actually 1620 for the one year period. And so Arif with his 10% per year interest rate should expect to earn 162 for the one year interest period. It's convenient for people using averages when the interest periods are a year long and pay interest all at the end - as they are with popular regular savers such as Nationwide's - as it means you don't have to worry about doing twelve separate interest periods and feeding the received monthly interest into your weighted average balance calculation.

    The reason the MSE simplified example is not accurate is because the average balance fed into it for the interest period is not accurate. If you improve the accuracy of the data fed into it, you improve the quality of the output so that you don't need to calculate 365 interest components and add them up to find a 'better' number.

    You mentioned in an earlier post:
    The MSE guide is intended to show, in simple terms, what is going on, but in reducing it to simple terms, it also becomes a little misleading. Interest is not paid on the average balance
    . Of course, it's a simplification to show the basic effect (and explain the reason why you don't get paid on the full 3k if your average deposited with the bank was some lower number).

    Of course, if your average balance of 1500 is only a guesstimate, the answer is only going to be in the same ballpark but not very accurate. If you replace 1500 with an actual observed and calculated average, it's probably close enough - not so far off as to say that using an average method is going to get you a poor and inaccurate result.
    • ValiantSon
    • By ValiantSon 16th Jul 18, 4:06 PM
    • 2,537 Posts
    • 2,509 Thanks
    ValiantSon
    But the average amount of money in the account over an interest period is calculated by reference to your data, which is, the money in the account each day. So if you know the weighted average balance that will be in the account, and the annual interest rate applied to such amounts, you can multiply them out and see how much you'll get.

    For a given interest calculation period, you are saying that they look at the balance at the end of each day and calculate interest on it and then add up the chunks of interest to get the total interest to pay. I wouldn't disagree with that, as it's a practical way to do it and banks need to know their daily exposure. But it's effectively the same number as you would get by looking, after the fact, at the average balance held for the relevant interest calculation period, and multiplying that average balance for the period by the rate for the period to get the amount which should be accrued.

    It's true that the MSE method is just a simplistic shortcut. If the method of calculation were to look at a more complex set of circumstances it could still work to the nearest few pence; you just have to perform the "average" calculation at a nice granular level of detail to be able to feed it the inputs.

    For example, they have Mr Matt Mattics where his "average balance was roughly half the 3,000, in other words 1,500... so Matt should expect to earn around 10% of 1,500"...

    Instead, they could have an example customer Mr Arif Metic where his average balance was , not roughly but actually 1620 for the one year period. And so Arif with his 10% per year interest rate should expect to earn 162 for the one year interest period. It's convenient for people using averages when the interest periods are a year long and pay interest all at the end - as they are with popular regular savers such as Nationwide's - as it means you don't have to worry about doing twelve separate interest periods and feeding the received monthly interest into your weighted average balance calculation.

    The reason the MSE simplified example is not accurate is because the average balance fed into it for the interest period is not accurate. If you improve the accuracy of the data fed into it, you improve the quality of the output so that you don't need to calculate 365 interest components and add them up to find a 'better' number.

    You mentioned in an earlier post: . Of course, it's a simplification to show the basic effect (and explain the reason why you don't get paid on the full 3k if your average deposited with the bank was some lower number).

    Of course, if your average balance of 1500 is only a guesstimate, the answer is only going to be in the same ballpark but not very accurate. If you replace 1500 with an actual observed and calculated average, it's probably close enough - not so far off as to say that using an average method is going to get you a poor and inaccurate result.
    Originally posted by bowlhead99
    So, essentially, you are saying that I am correct. We didn't need the verbose post for you to say that.

    I understand the mathematics behind the calculations, but as represented by MSE - and aj23 - the method used produces an inaccurate result. MSE do actually have a calculator, which produces an accurate result, but their guide oversimplifies it. The result of this oversimplification is that people end up not understanding, and latching on to half truths.
    • bowlhead99
    • By bowlhead99 16th Jul 18, 4:45 PM
    • 8,235 Posts
    • 15,018 Thanks
    bowlhead99
    So, essentially, you are saying that I am correct. We didn't need the verbose post for you to say that.

    I understand the mathematics behind the calculations, but as represented by MSE - and aj23 - the method used produces an inaccurate result. MSE do actually have a calculator, which produces an accurate result, but their guide oversimplifies it. The result of this oversimplification is that people end up not understanding, and latching on to half truths.
    Originally posted by ValiantSon
    You had mentioned earlier that:
    The MSE guide is intended to show, in simple terms, what is going on, but in reducing it to simple terms, it also becomes a little misleading. Interest is not paid on the average balance!
    The first sentence I agree with.

    The second - that interest is not paid on the average balance - does not sit easily with me as it can be proven that if you are accurate with the determination of the"average balance" and then multiply it by the interest rate for the period you will get exactly the same result as if you do tens or hundreds of daily calculations based on a daily rate and then add them up.

    The MSE example is deliberately lazy and inaccurate in saying the person's average balance was 'roughly' x for simplicity, but its inaccuracy is a fault of using a "roughly half" figure as the average, not a problem in using an average balance per se. Using an accurate average would get you an accurate output.

    Aj23 suggested:
    You are always looking for a reason to argue, you just can't help yourself
    which amused me a little because I have seen you in action on other threads.

    One of your responses to that post of his was "nobody in this thread disagrees with what I wrote". I do agree with you saying that interest is calculated on a daily basis based on what's in the account. However, I disagree with your soundbite that "Interest is not paid on the average balance!". The functional effect of calculating interest on individual daily balances from day to day and adding them up at the end of the interest period, is that you end up with a calculation that overall, reflects interest being paid on some average of the daily balances. So, as a dissenter I felt it was worth pointing out.

    Apologies if you don't like the verbosity, it probably didn't take all the words in my post above to make you realise that what you had said was an oversimplification and capable, on a standalone basis, of being disagreed with. But if I had said something shorter and not explained where I was coming from, you would probably argue with it, as is your wont.
    Last edited by bowlhead99; 16-07-2018 at 4:47 PM.
    • ValiantSon
    • By ValiantSon 16th Jul 18, 6:19 PM
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    ValiantSon
    You had mentioned earlier that:
    The first sentence I agree with.

    The second - that interest is not paid on the average balance - does not sit easily with me as it can be proven that if you are accurate with the determination of the"average balance" and then multiply it by the interest rate for the period you will get exactly the same result as if you do tens or hundreds of daily calculations based on a daily rate and then add them up.
    Originally posted by bowlhead99
    Sorry, but that doesn't actually mean that interest is paid on the average balance. Just because you can create a formula for it, that doesn't mean that is how it is calculated - and indeed it isn't how it is calculated!

    The MSE example is deliberately lazy and inaccurate in saying the person's average balance was 'roughly' x for simplicity, but its inaccuracy is a fault of using a "roughly half" figure as the average, not a problem in using an average balance per se. Using an accurate average would get you an accurate output.
    Originally posted by bowlhead99
    I fear that you are missing the point. The MSE guide is written to explain why people shouldn't be surprised at their returns, but it oversimplifies things to a point that it becomes misleading. I'm not arguing that you cannot do a retrospective calculation of interest based on the actual average balnce, but the MSE guide misleads people into thinking that the average is half of what they have deposited into the account. This is my problem with the explanation, and also why it is not actually helpful to talk about average balances, because that is not how the interest is calculated.

    Aj23 suggested: which amused me a little because I have seen you in action on other threads.
    Originally posted by bowlhead99
    Oh, the irony!

    aj23 doesn't like that I have corrected him previously on his inaccurate and sometimes wildly misleading comments. That is his problem, not mine.

    If I disagree with something then I am entitled to argue my case, and if I see an error in something then I am equally entitled to point it out.

    One of your responses to that post of his was "nobody in this thread disagrees with what I wrote". I do agree with you saying that interest is calculated on a daily basis based on what's in the account. However, I disagree with your soundbite that "Interest is not paid on the average balance!".
    Originally posted by bowlhead99
    At the time that I wrote that, nobody had disagreed with what I had written. Funnily enough, I don't have magical powrs to know that you would pop up four days later to try and argue with me about something completely irrelevant. The fact that you can create an equation to create to correctly calculate on the average balance, doesn't mean that is how it is done.

    I fear that you are trying to argue an irrelevancy for the sake of putting me in my place. It isn't the first time that you have behaved in this way, with either me, or with others.

    The functional effect of calculating interest on individual daily balances from day to day and adding them up at the end of the interest period, is that you end up with a calculation that overall, reflects interest being paid on some average of the daily balances. So, as a dissenter I felt it was worth pointing out.
    Originally posted by bowlhead99
    You tried to argue that something was possible, rather than it was what was actually done. What is actually done is what I said, so your comment was pointless, other than to try and score points over me.

    Apologies if you don't like the verbosity, it probably didn't take all the words in my post above to make you realise that what you had said was an oversimplification and capable, on a standalone basis, of being disagreed with. But if I had said something shorter and not explained where I was coming from, you would probably argue with it, as is your wont.
    Originally posted by bowlhead99
    Once again, I have to say, oh, the irony!
    • bowlhead99
    • By bowlhead99 16th Jul 18, 7:13 PM
    • 8,235 Posts
    • 15,018 Thanks
    bowlhead99
    Funnily enough, I don't have magical powrs to know that you would pop up four days later to try and argue with me about something completely irrelevant.
    Originally posted by ValiantSon
    I hadn't noticed that your posts were last week's, I just opened a thread that was updated earlier today, and noticed that the last half of it seemed to be mostly you putting someone in their place ending with you banging your head against the wall saying you give up because they never listen, and then just in case they were still listening, doing another three posts to "argue with a brick wall" further, or perhaps to belittle them a bit more for good measure

    The fact that you can create an equation to create to correctly calculate on the average balance, doesn't mean that is how it is done.
    It's certainly an efficient way of getting it done, and speaking from experience it's how accountants might calculate an interest receivable or payable when the person receiving it doesn't really need to know the exact daily accrual at a point on time (such as in an account where the interest isn't added to capital until the end of the period, as in a popular range of regular savings accounts), and/or the capital isn't being withdrawn before the interest period is up - as we are describing here..

    In your opening post on this thread, OP had ended his post with, "Too good to be true? Or does it work like a regular saver in which you get 3% on the average balance?"
    You could have been kind and said "yes, sorry buddy the other way you were looking at it is too good to be true. You're right that you'll effectively get paid on the average balance you've had in there over the period, not an entire year's interest on the amount you have built up to at some snapshot date."

    That would be the way to do it without trying to get argumentative.

    But what you said was:
    Regular savers don't pay interest on the average balance. They pay whatever the rate is on all the money in the account, calculated daily. This is not the average balance...
    When you look at how much you receive in a regular saver account, it is the same as receiving the interest rate for the time period on the average balance for the time period. So it's confusing to tell someone that regular savers *don't* pay interest on the average balance held in them.

    And to say that "all the money in the account, calculated daily... this is not the average balance" is likewise confusing because what is the average balance for a period, if not the average of each day's closing balance, daily?


    Once again, I have to say, oh, the irony!
    I expect to outsiders we each just come off as idiots who like to read our own words in print more than we like to keep our dignity.
    Last edited by bowlhead99; 16-07-2018 at 7:18 PM.
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