2 year fixed rate accounts. Strange difference in interest paid?

[stevensfo]

Something I've noticed before. I generally use AJBell and Monzo to find fixed rate savings.

Could someone please go here:

https://www.ajbell.co.uk/cash-savings#list

It has £30 000 as default, though the minimum is usually £1000.

Scroll down to

5.25% 2 years fixed deposit Tandem £3150 Total interest on £30 000.

5.21% 2 years fixed deposit National Bank of Egypt £3207 Total interest on £30 000.

Why is the interest at 5.21% after 2 years more than at 5.25%.


I would ask the Tandem Bank CEO, though apparently he's disappeared with a heavy briefcase.


Steve

[the0ni0nking]

Is it because the 2yr Tandem one pays interest annually (so compounds on the 1st year interest) whereas the 2yr Egypt one pays only at the 2 year maturity?

I've not done the maths but that would seem possible when there is only a marginal difference in the interest rate.

[XFool]

Something I've noticed before. I generally use AJBell and Monzo to find fixed rate savings.

Could someone please go here:

https://www.ajbell.co.uk/cash-savings#list

It has £30 000 as default, though the minimum is usually £1000.

Scroll down to

5.25% 2 years fixed deposit Tandem £3150 Total interest on £30 000.

5.21% 2 years fixed deposit National Bank of Egypt £3207 Total interest on £30 000.

Why is the interest at 5.21% after 2 years more than at 5.25%.

Because:

"5.25% 2 years fixed deposit Tandem £3150 Total interest on £30 000" is Simple interest
"5.21% 2 years fixed deposit National Bank of Egypt £3207 Total interest on £30 000" is Compound interest

First case: over two years 2 x 5.25% = 10.25%
Second case: over two years 1.0521 x 1.0521 = 1.1069 = 10.69% (To two decimal places)

[stevensfo]

Something I've noticed before. I generally use AJBell and Monzo to find fixed rate savings.

Could someone please go here:

https://www.ajbell.co.uk/cash-savings#list

It has £30 000 as default, though the minimum is usually £1000.

Scroll down to

5.25% 2 years fixed deposit Tandem £3150 Total interest on £30 000.

5.21% 2 years fixed deposit National Bank of Egypt £3207 Total interest on £30 000.

Why is the interest at 5.21% after 2 years more than at 5.25%.

Because:

"5.25% 2 years fixed deposit Tandem £3150 Total interest on £30 000" is Simple interest
"5.21% 2 years fixed deposit National Bank of Egypt £3207 Total interest on £30 000" is Compound interest

First case: over two years 2 x 5.25% = 10.25%
Second case: over two years 1.0521 x 1.0521 = 1.1069 = 10.69% (To two decimal places)

First case: over two years 2 x 5.25% = 10.25%

10.5% surely?

But I see the difference. Thanks! I had a feeling it would be something like that.

My ability with Maths ended soon after finishing the Peter and Jane books.

Steve