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How/when is savings interest calculated?

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  • 24-01-2013 11:49pm
    #1
    joeKel73
    Closed Accounts Posts: 3,689 ✭✭✭


    I set up my first savings account with Ulster Bank recently. It's around 3.5% AER variable rate (was 4% when I was signing up). The interest is paid out once a year.

    You can very easily move funds between the savings and current account at any time.

    So I'm curious - how is the annual interest payout calculated, since both the rate and the balance are varying throughout the year?


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    #2
    dotsman
    Registered Users Posts: 3,636 ✭✭✭dotsman


    It should state so in the terms and conditions. From what you say in the first post, it is probably a case of calculated daily and applied annually.


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    #3
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    Yes generally calculated daily as balances would changes daily and then the interest is applied monthly/annually!


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    #4
    joeKel73
    Closed Accounts Posts: 3,689 ✭✭✭joeKel73


    Thanks - was thinking that alright but wasn't sure.

    Get paid monthly and was planning on directing a chunk of that into the savings account every month and live off the rest in the current account. But it looks like it'll make more sense to move everything into the savings account and transfer into the current account over the month as I need it.


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