Apparent underpayment of interest on FA eSavings account

[GeneralZod]

Details:

Balance on Friday 28th Sept after interest payment €14,979.69
Lodgement on 2nd Oct of €20.31 bringing balance to €15,000.00
Withdrawal on 26th Oct of €60.00 to ensure bal below €15k €14,940.00
Nett Interest payment after 20% DIRT deducted on 31st Oct of €48.58 €14,988.58

FA say the account has an AER of 5.22% or a gross figure of 5.1%. These figures are internally consistent using the of AER where interest is paid n times per year (formula d).

The FA website says the interest is calculated daily and paid monthly. There were 33 days between Sept 28th and Oct 31st.


Therefore the interest payment for the period should have been at least €55.11 = €14,940 * (0.051/365 days) * 0.8 * 33 days

Before I complain to FA can anyone see an error in these calculations.

 

[IrlJidel]

The FA website says the interest is calculated daily and paid monthly. There were 33 days between Sept 28th and Oct 31st.


Therefore the interest payment for the period should have been at least €55.11 = €14,940 * (0.051/365 days) * 0.8 * 33 days

Before I complain to FA can anyone see an error in these calculations.

Using your method I got the same figure for interest as was credited to my account by FA. Could your rate had reverted to the lower rate as it was at 15,000, even though lower rate is supposed to be for >= 15,001

 

[GeneralZod]

Could your rate had reverted to the lower rate as it was at 15,000, even though lower rate is supposed to be for >= 15,001

That accounts for it. Using the formula above:

8 days just below €15k at 5.1% gross less DIRT = €13.36
25 days at €15k 4.25% gross less DIRT = €34.79
TOTAL €48.15

I think I've solid grounds for complaint as my balance never exceeded €15k and their [broken link removed] clearly states the lower interest rate only applies for balances above €15k. Image grab here for record keeping.

How typical that this would happen

 

[ClubMan]

Using your method I got the same figure for interest as was credited to my account by FA. Could your rate had reverted to the lower rate as it was at 15,000, even though lower rate is supposed to be for >= 15,001

Are you sure? I thought that the lower rate kicked in once the balance was over (or even at?) €15,000 (e.g. €15,001 or maybe even €15,000.01). They definitely say "5.22% on balances up to €15,000" on their [broken link removed].

 

[GeneralZod]

They definitely say "5.22% on balances up to €15,000" on their [broken link removed].

Clubman,

To the right of that they say 4.33% if balance > €15,000.

Below it they say "4.33% applied to entire balance where the eSavings Account balance is between €15,001 - €1,000,000".

On the separate interest rate summary page they link to from that page they have

Balance Gross AER*
€15,001 - €1,000,000 4.25% 4.33%
€1 - €15,000 5.10% 5.22%

So the clear inference given all the other mentions of the applicable rate is the "up to" used there means "up to and including".

The mathematical complement of > is also <=.

 

[ClubMan]

OK - I missed the other notes.

 

[Godfather]

The FA website says the interest is calculated daily and paid monthly. There were 33 days between Sept 28th and Oct 31st.

Hi General, are you sure that they didn't pay you a bit of interest for the part of sept? Weird...

Sorry to hear about your experience. Good luck!

 

[Godfather]

I kept my balance always quite far away from the 15000 Euro and I think I got the right amount for interest... Looks like an amount equal to 15000 Euro drops the rate already...