Less interest for Jan

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mike_p
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Re: Less interest for Jan

Postby mike_p » Tue Feb 09, 2016 9:23 am

From the first paragraph on the Classic Plus landing page:

>No interest is paid on your balance over £2,000.

Sarah
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Re: Less interest for Jan

Postby Sarah » Tue Feb 09, 2016 11:25 am

Fun with statistics, eh? If you put the full £2000 into an account for the full term then you get the maximum amount of interest, even if the APR is then slightly below 5%. We're talking about a difference that's a tiny percentage of interest on interest, so I'm not going to get too worked up about it. TSB might already have small print that covers them or argue that the account T&Cs do... so, unless someone's going to challenge their "5%" advertising or try to obtain a goodwill gesture in relation to this issue... who's going first?

planteria
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Re: Less interest for Jan

Postby planteria » Tue Feb 09, 2016 1:03 pm

nothing to challenge Sarah.

mike_p wrote:From the first paragraph on the Classic Plus landing page:
>No interest is paid on your balance over £2,000.


that's fine. that doesn't disprove my point.. we are just in the process of understanding how compound interest rates work.

DC.
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Re: Less interest for Jan

Postby DC. » Wed Feb 10, 2016 6:59 am

Not really, like mike says anything over £2000 doesn't receive interest, so they aren't paying interest on interest, just interest on the £2000, which I why I transfer out the interest received every month from my GF account

Interestingly I setup a spreadsheet to keep track of money in the TSB accounts, as we put the kids savings in there too, as kids savings are rubbish.
As GF doesn't pay tax, I have her spreadsheets calculating 4.89%, which works out correctly, although I sometimes have to add days in, then take them out next month, depending on when the interest is paid.
I pay tax, and have mine calculated at 3.91%, and it is always wrong, Strange.

mike_p
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Re: Less interest for Jan

Postby mike_p » Wed Feb 10, 2016 9:03 am

we are just in the process of understanding how compound interest rates work.


"We"?!?

planteria
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Re: Less interest for Jan

Postby planteria » Wed Feb 10, 2016 10:37 am

i was trying to be kind haha
the rate on £2000 is correctly presented at 5% because the monthly rate compounds.

DC.
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Re: Less interest for Jan

Postby DC. » Thu Feb 11, 2016 1:08 am

I didn't realise there was a 2nd page, my reply was based on page 1 comments, and I was at the end of my shift, so I posted, and logged off.

I still don't agree that there is compounding interest, unless the amount in the account is less than £2000, and doesn't go over it.

planteria
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Re: Less interest for Jan

Postby planteria » Thu Feb 11, 2016 9:36 am

if your balance remained at, say £3,000+, with money in & out, DDs etc. qualifying in all respects, then the interest you would be paid on the £2,000 will be the 4.89%, or whatever it is, which over the year compounds to 5%. it doesn't compound in terms of interest being calculated on the higher, inclusive of interest, value, but the interest that is paid earlier contributes earlier and so is part of the £2,000 in effect, which through the year compounds into the 5%. i'm writing with two young ladies rowing over me, so hope that makes sense ;)... but either way, TSBs 5% deal is both correct and good :) ..and i shall leave you to it :geek:.


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