santander 123 joint a/c interest on balance

A question about : santander 123 joint a/c interest on balance

Hi. Not very good with maths so cant work out if my months interest is correct. This is a joint account with myself a non tax payer and my husband a standard tax payer. Could someone tell me how to work out the monthly interest on a balance of approximately Ј14000. The transaction shows as interest after tax 2.12 deducted. I realised it wont be entirely accurate because the balance has fluctuated between 14k & 15k during the month but as its my first interest payment i would like to have a rough idea. Thanks

Best answers:

• The calculation for sterling interest is:
  (Principal x Interest rate x days)/365 (or 36500 to convert the interest rate to a percentage)
  So, for example, 12,000 for two days at 3% would be Ј1.97.
  If you can put it on a spreadsheet it should be fairly straightforward to calculate. I can't help you with the tax aspect though.
  I hope that this helps. I should point out that some other currencies work on a 360 day year so you'd divide by 360 rather than 365.
• 14000*((1+3%)^(1/12)-1)*(1-20%/2)=Ј31
  - can vary slightly depending on the number of days.
• I've calculated (hopefully I haven't made any mistakes) that to pay Ј2.12 tax on the interest of Ј14,000 for a month you'd be receiving interest at 0.92%. With the variations of the balance I'd assume that you're receiving interest at 1%.
• Others have given you the way of calculating the interest on the Santander 123 and on Ј14000 you should be earning 3% gross so in a normal month that should be Ј34 approx gross -Ј3.40 tax (10% for one non tax payer and one BR taxpayer) providing a) you have filled out a tax exemption form for yourself b) this is calculated on a 30 day month on Ј14000 so if the balance has changed significantly this will differ and c) all other conditions of the Santander 123 account have been met - funded by Ј500 per month from an external source and 2 active direct debits.
• Hi. Thanks for the replies
  Enthusiastic Saver. How did you arrive at 3.40 Tax deduction? Excuse me if I am thick but how do you deduct 20%(standard tax) and 10%(non taxpayer) from 3% interest. Ive also advised Santander I'm a non tax payer via online banking where there is an option to choose.
  a&akay. I have also opened an account in my own name holding approx Ј14k as well. My husband is terminally ill so his Ј14k is in the joint bank account to save hassle and will be easier for me to handle when the time comes. I know it would make sense to transfer monies from joint to single account with regards to me being a non tax payer but I want him to be able to access monies if anything happened to me as we are both getting on in years.
  Grumbler. Does your formula take into account standard and non tax payer?
  Thanks all
• On a joint account half of the interest will be taxed at 20% and the other half at 0% giving an effective tax deduction of 10%.
  Quote:
• Santander will treat each of you as owning half the balance if one is a non tax payer.
  Snap! Molerat
• Hi. Thankyou Molerat and Yorkshireboy. I now understand and based on the formula given by Yorkshireboy my interest is spot on given that I did not transfer the monies into the account until 4th Feb so interest only calculated for 19 days to 23rd Feb. Just as a matter of interest does anyone know how many days in a month does Santander use for interest calculations is it 30 or 31?
• Ok. I'll bear that in mind