How is my interest calculated?
We use standard calculation to work out the amount of interest you earn:
- Cleared balance (or transaction amount)
- Multiplied by interest rate (or rate change difference)
- Multiplied by number of days to the next interest payment date
- Divided by number of days in the year (i.e. 365 or 366 in a leap year)
When you open your account, we project how much interest you will be paid at the next interest payment date, assuming the balance and the interest rate don't change.
| Transaction type | Cash deposit |
|---|---|
| Amount | £10,000.90 |
| Interest rate | 5% |
| Date paid in | 1 Jan 2009 |
| Interest payment date | 31 May 2009 |
| Number of days to the next interest payment date | 151 |
£10,000.90 x 5% x 151 days ÷ 365 days = £206.87 gross
This is the gross amount of interest due.
What happens if I make additional transactions?
If you make further transactions, the amount of interest due will either increase or decrease depending upon whether you pay funds into the account or make withdrawals. For example:
| Transaction type | Cheque withdrawal |
|---|---|
| Amount | £1,000.32 |
| Interest rate | 5% |
| Date paid in | 1 Feb 2009 |
| Interest payment date | 31 May 2009 |
| Number of days to the next interest payment date | 120 |
£1,000.32 x 5% x 120 days ÷ 365 days = £16.44 gross
Because this is a withdrawal, this amount will be deducted from the amount you are due to be paid. The new amount of interest you are due to receive on 31 May 2009 in the example, is £190.43 gross (£206.87 - £16.44).
When do I earn interest on a deposit?
If you pay cash into your account, your account will earn interest from the day of receipt. Deposits via CHAPS (Clearing House Automated Payment System), BACS (Bankers Automated Clearing Services) and FPS (Faster Payments Service) will also earn interest from the business day of receipt.
You will earn interest from the day of the payment if you transfer funds from another Virgin Money account.
If you pay a cheque into your Virgin Money account before 4.30pm on a working day, and all is ok with the cheque, you will receive interest the next working day (a working day excludes Saturdays, Sundays and Bank Holidays).
What about when I make withdrawals?
If you withdraw funds from your account by cash, cheque, FPS or CHAPS we will pay you interest up to and including the day prior to the date of withdrawal. In the case of transfers between Virgin Money accounts, we will pay interest up to and including the day prior to the date of the transfer on the account from which the funds are withdrawn.
- You will find details in our Interest Calculation leaflet. Please download the file, and print it out. Interest Calculation leaflet
If you do not have a copy download Acrobat Reader from the Adobe site Link opens in a new window.