Compare Lloyds and Chase savings interest profit

Question

So, Chase has a savings account for 1.5%. They calculate the 1.5% AER (1.49% gross) variable interest daily and pay it monthly. Lloyds, on the other had 0.20% gross interest (no more info given in the app though).

So, for an amount of 5000 the Chase will pay: (1.5%/365)500030 = 6.16438356164 pounds per month

and Lloyds 0.2%*5000= 10 ?

Am I missing something here? According to that, something is not right to me: https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php

Lloyds will pay me 10 pounds and Chase 75.56:

Are you asking why one bank will pay 1.5% while a different one only pays 0.2%? — quid, Jun 20 '22 at 04:40
@quid I have asked whether the profit is bigger based on the compounds and different calculation of the interest. — Datacrawler, Jun 20 '22 at 22:27

score 4 · Accepted Answer · answered Jun 19 '22 at 12:02

If you ignore the compounding issue:

Lloyds will pay you 5000*(0.2/100) or 10 interest

Chase will pay you 5000*(1.5/100) or 75 interest.

The compounding at Chase will raise that slightly, and the calculator will show you the impact of different compounding amount. After a year of daily compounding it was 0.56 pounds extra.

The problem with the formula you used for Chase, is that there was no exponent in the formula. Without the exponent you aren't calculating the impact of compounding.

Compare Lloyds and Chase savings interest profit

1 Answers1