Explaination of ISA interest please

[Moley RUFC]

I opened a 12 month fixed rate Natwest 3.51% ISA in April. So far I have paid £300 a month into it so have £900 (July payment due in next few weeks).

The interest is paid monthly, and to date I have £3.70 on the £900. How can that be right? 3.51% of £900 is more than £3.70


Confused

[Mx_Stu]

Moley RUFC said:

I opened a 12 month fixed rate Natwest 3.51% ISA in April. So far I have paid £300 a month into it so have £900 (July payment due in next few weeks).

The interest is paid monthly, and to date I have £3.70 on the £900. How can that be right? 3.51% of £900 is more than £3.70


Confused

The 3.51% is an annual rate, monthly rate is 0.2925% (ish)

1st month £300 * 0.2925% = 88p
2nd month £600 * 0.2925% = £1.75
3rd month £900 * 0.2925% = £2.63

Give or take the time between when you pay the money in and when interest is calculated.

£3,600 in the account for a full 12 months would earn you circa £126.

Edited by Mx_Stu on Saturday 11th July 11:25

[Flippin' Kipper]

I'm no expert but I think it is worked out yearly.

So £300 in the first month should get you £10.53 intrest yearly, and £0.88 monthly and so on. Depending on when you set up the ISA you may want to check the intrest rates have not changed, and that you qualify for the highest rate of intrest.

[Moley RUFC]

Mx_Stu said:

Moley RUFC said:

I opened a 12 month fixed rate Natwest 3.51% ISA in April. So far I have paid £300 a month into it so have £900 (July payment due in next few weeks).

The interest is paid monthly, and to date I have £3.70 on the £900. How can that be right? 3.51% of £900 is more than £3.70


Confused

The 3.51% is an annual rate, monthly rate is 0.2925% (ish)

1st month £300 * 0.2925% = 88p
2nd month £600 * 0.2925% = £1.75
3rd month £900 * 0.2925% = £2.63

Give or take the time between when you pay the money in and when interest is calculated.

£3,600 in the account for a full 12 months would earn you circa £126.

Edited by Mx_Stu on Saturday 11th July 11:25

Thanks