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Let's assume there is an interest rate of 0.61%. So, the interest is 0.61% AER which is then divided by 365 and paid daily. The interest rate is for the year, not per day however interest is paid daily.

A calculation found online is shown below:

enter image description here

I am putting an amount of 20000 as an example. Based on the image above I should get the following:

[20000*(1+0.00001671232)^30]−20000

which means the interest is nearly 10 pounds for 30 days? And 122 pounds for 365 days?

A calculator for a normal interest online for a year also gave me this: enter image description here

In either case, the interest seems a bit unreal for a fcsc bank. Is there a chance that I will get taxed on any amount?

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  • In what way does "the interest seems a bit unreal for a fcsc bank"?
    – hmallett
    Mar 19, 2022 at 14:21

2 Answers 2

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If you put 20,000 into a bank and they pay 0.61% over a year then that will mean

20,000 * 0.0061 = 122 of interest

The compounding will raise that number slightly.

In either case, the interest seems a bit unreal for a fcsc bank. Is there a chance that I will get taxed on any amount?

0.61% seems good today, but a few decades ago you could get 10 times that much.

The question about is it taxable, depends on the jurisdiction and what other income you have.

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  • Lloyds and highstreet banks give around 0.01% lately. 0.62% was a shock for me. I wonder if I can find an even better one
    – Datacrawler
    Mar 11, 2022 at 13:15
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    @Datacrawler Depending on what kind of saving rules you are willing to play with (e.g. flexible, fixed-term, with X month of notice), there are quite a few options in the UK (or England, at least) that is paying better than 0.62% as of Mar 2022. Comparison websites for "UK saving accounts" (of which there are many) are your friend in this case.
    – B.Liu
    Mar 12, 2022 at 16:07
  • Can confirm you can get upward of 2%+ on normal savings account without any fixed term.
    – bracco23
    Nov 8, 2022 at 18:57
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You may have to pay tax on interest from savings. It depends upon how much you earn and what income tax bracket you're in.

This page has the full, official detail.

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