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It’s simple & rewarding to save. Earn 6.00%* interest until February 29, 2024.
October 16, 2023
3:50 pm
Lodown
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This is Tang's fine print for this 6% offer:

The Promotional Interest Rate is an annualized rate, and, subject to the limits and qualifications outlined in these Terms and Conditions, the Promotional Interest will be calculated daily during the Offer Period and paid monthly.

So 6% annualized is equivalent to about 5.83% daily interest paid monthly as compared to the usual method of stating the Interest on Daily Interest accounts.

Once again sneaky Tang is using smoke and mirrors on customers. Check your end of October statements !!

October 16, 2023
6:45 pm
InterestThis
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Which Canadian savings account pays-out compound interest daily??

October 16, 2023
6:52 pm
mordko
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Lodown said
This is Tang's fine print for this 6% offer:

The Promotional Interest Rate is an annualized rate, and, subject to the limits and qualifications outlined in these Terms and Conditions, the Promotional Interest will be calculated daily during the Offer Period and paid monthly.

So 6% annualized is equivalent to about 5.83% daily interest paid monthly as compared to the usual method of stating the Interest on Daily Interest accounts.

Once again sneaky Tang is using smoke and mirrors on customers. Check your end of October statements !!
  

Confused. Why is this “smoke and mirrors”? The numbers look even worse for people with excessive focus on hourly interest rates but an annualized interest rate is kinda standard.

October 16, 2023
7:07 pm
InterestThis
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I can't find any Canadian savings account that pays-out daily compound interest. Some display accrued interest, but its not compounding daily.
Anyone know of one?

October 16, 2023
7:47 pm
Lodown
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Most every other FI quotes an interest rate for their Daily Interest Savings accounts that compound monthly - this equates to a greater "Annual interest rate". Tang broke this standard in their fine print.

October 16, 2023
8:51 pm
InterestThis
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I don't get it, Tang has daily interest that also compounds monthly.

October 16, 2023
8:53 pm
althisa
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Lodown said
Most every other FI quotes an interest rate for their Daily Interest Savings accounts that compound monthly - this equates to a greater "Annual interest rate". Tang broke this standard in their fine print.  

That is a new learning for me. Can you provide an example from another FI?

The terms and conditions for TNG are specified when you sign up. The one for the previous promo are available here: https://www.tangerine.ca/en/landing-page/EARNMORE/termsandconditions/tc8b21vs23

e.g.
"The Promotional Rate of 6.00% is an annualized rate and will apply to eligible deposits as outlined above. Subject to the applicable limits and qualifications outlined in these Terms and Conditions, interest on eligible deposits made during the Promotion Period will be calculated daily at the Promotional Rate (“Promotional Interest”) and paid monthly to Eligible Savings Accounts. Clients will receive Promotional Interest in two separate payments – (1) interest calculated at the posted rate of interest listed on the Bank’s website which is subject to change without notice (the “Posted Rate”) is paid at the end of the month in which it was accrued (“Posted Rate Interest”), (2) interest calculated at a rate that reflects the difference between the Posted Rate and the Promotional Rate (“Additional Interest Rate”) is paid at the start of the month following the month in which it was calculated (“Additional Interest”). For clarity, the Promotional Rate will always equal the sum of the Posted Rate and the Additional Interest Rate such that if the Posted Rate changes, this will result in a corresponding change to the Additional Interest Rate so that the Promotional Rate remains unchanged. Similarly, Promotional Interest will always equal the sum of the Posted Rate Interest and the Additional Interest. Notwithstanding anything in this Section, the Bank may change the Promotional Rate at any time without prior notice."

The last sentence is interesting, which is why i keep an eye on other FIs and their rate changes on this forum!

October 16, 2023
9:16 pm
mordko
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Had a look at the Meridian promotion.

T&Cs state:

“ Bonus Interest and/or Posted Rates are annualized rates and may change at any time without prior notice.”

Then I picked HSBC promotion. It also uses annual rate of 6.35% in its promotion.

October 16, 2023
10:13 pm
Norman1
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There's no issue with Tangerine's fine print.

Similar wording is in their 4.30% offer that was from October 4, 2022 to December 31, 2022:

8. A Promotional Interest Rate of 4.30% will apply to Eligible Deposits under this Offer. …

9. The Promotional Interest Rate is an annualized rate, and, subject to the limits and qualifications outlined in these Terms and Conditions, the Promotional Interest will be calculated daily during the Offer Period and paid monthly. …

Tangerine is just saying that the quoted 6% rate means 6% per annum. That wording says nothing about compounding monthly or annually.

Tangerine could have quoted the non-annualized 0.01643836% per diem rate instead. But, that's messy marketing wise.

October 16, 2023
11:22 pm
cgouimet
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InterestThis said
I don't get it, Tang has daily interest that also compounds monthly.  

The new math ... 🙂

CGO
October 17, 2023
6:24 am
Lodown
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This is how Tang advertises the current regular 1% Interest on their Savings Account:

"With a Tangerine Savings Account, you’ll enjoy no minimums, no service charges and no unfair† fees. You’ll also earn great interest on every dollar, every day.
Interest rate1.00%
Key Features of a Savings Account Great rate
Grow your savings with an interest rate of 1.00% since July 30, 2022.
No minimum balances
Earn the same great rate on every dollar in your Account. ........Estimator tool is for demonstration purposes only and should not be relied upon as financial or other advice. Calculations are estimates only based on the current interest rate of 1.00%, which may change, and based on interest calculated daily and paid monthly, assuming no withdrawals."

Here Tang's advertised 1% is actually more than 1% on an annual basis due to the monthly compounding.

On this same Savings account when they advertise the special 6% rate, they suddenly changes how it is calculated stating in the fine print that it is an "annual" rate instead of calculated daily and paid monthly, as one would expect. By making this change, the 1% has gone up to 5.84% (and not 6% like they advertise in large print). Smoke and mirrors.

October 17, 2023
6:53 am
cgouimet
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Lodown said
This is how Tang advertises the current regular 1% Interest on their Savings Account:

"With a Tangerine Savings Account, you’ll enjoy no minimums, no service charges and no unfair† fees. You’ll also earn great interest on every dollar, every day.
Interest rate1.00%
Key Features of a Savings Account Great rate
Grow your savings with an interest rate of 1.00% since July 30, 2022.
No minimum balances
Earn the same great rate on every dollar in your Account. ........Estimator tool is for demonstration purposes only and should not be relied upon as financial or other advice. Calculations are estimates only based on the current interest rate of 1.00%, which may change, and based on interest calculated daily and paid monthly, assuming no withdrawals."

Here Tang's advertised 1% is actually more than 1% on an annual basis due to the monthly compounding.

On this same Savings account when they advertise the special 6% rate, they suddenly changes how it is calculated stating in the fine print that it is an "annual" rate instead of calculated daily and paid monthly, as one would expect. By making this change, the 1% has gone up to 5.84% (and not 6% like they advertise in large print). Smoke and mirrors.  

Your acceptance of the offer, or not, is totally up to you. If you are not comfortable with the Tangerine math, put your $ elsewhere ...

CGO
October 17, 2023
8:13 am
InterestThis
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If someone wants to total their interest end of month, and see if the monthly compounding from Tangerine is subtracted, then let us know. I do not think it is. But this is the text from Tangerine.

"The Promotional Interest Rate is an annualized rate, and, subject to the limits and qualifications outlined in these Terms and Conditions, the Promotional Interest will be calculated daily during the Offer Period and paid monthly."

October 17, 2023
8:35 am
Wrayzor
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Previous promo interest was accurate to the penny for me using the annualized rate with this formula:

Promo Annual Rate/365x[#days]x[new funds in account]

Now, the promo interest earned does not receive the promo rate in subsequent periods (so no compounding of the promo interest, as pointed out somewhere here previously). I guess that does decrease the overall interest rate, but it's not clear to me that that's really what's being described as smoke and mirrors.

October 17, 2023
8:41 am
HermanH
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Wrayzor said
Previous promo interest was accurate to the penny for me using the annualized rate

Same here

November 3, 2023
9:38 am
Lodown
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Has anyone calculated their Interest for October? How much less than 6% is it?

November 3, 2023
10:22 am
calderbennett
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Lodown said
Has anyone calculated their Interest for October? How much less than 6% is it?  

Yes. I had $0 on Oct 1st, added $20k on Oct 6th and another $25k on Oct 30th. I estimated 6% interest would be $90.41. Received $90.27. Not complaining.

November 5, 2023
7:49 am
Lodown
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Based on your numbers you got 5.78% for the 31 days in October. This works out to 5.94% annually....not quite 6% due to rounding error.

6% compounded monthly would have given you $93.70 in Interest for October.

November 5, 2023
8:25 am
althisa
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Lodown said
Based on your numbers you got 5.78% for the 31 days in October. This works out to 5.94% annually....not quite 6% due to rounding error.

6% compounded monthly would have given you $93.70 in Interest for October.  

I am trying to replicate the calculations here and coming up with yet another # $98.39
Balance Oct 1= $0
Balance Oct 6= $20,000
Balance Oct 30= $45,000
Balance Oct 31= $45,000

(Balance*6%/Months in year)*(Days in Account)+(New Balance*6%/Months in year)*(Days in Account)
=($20,000*0.06/12)*(26/31)+($45,000*0.06/12)*(2/31)
=$98.39

So $90.41 or $90.27 does seem lower than estimated, unless the policy applied is: $ in account does not count on deposit day, only counts for full day interest next day

Then the revised calculation is
(Balance*6%/Months in year)*(Days in Account)+(New Balance*6%/Months in year)*(Days in Account)
=($20,000*0.06/12)*(25/31)+($45,000*0.06/12)*(1/31)
=$87.90

November 5, 2023
10:13 am
Lodown
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althisa said

I am trying to replicate the calculations here and coming up with yet another # $98.39
Balance Oct 1= $0
Balance Oct 6= $20,000
Balance Oct 30= $45,000
Balance Oct 31= $45,000

(Balance*6%/Months in year)*(Days in Account)+(New Balance*6%/Months in year)*(Days in Account)
=($20,000*0.06/12)*(26/31)+($45,000*0.06/12)*(2/31)
=$98.39

So $90.41 or $90.27 does seem lower than estimated, unless the policy applied is: $ in account does not count on deposit day, only counts for full day interest next day

Then the revised calculation is
(Balance*6%/Months in year)*(Days in Account)+(New Balance*6%/Months in year)*(Days in Account)
=($20,000*0.06/12)*(25/31)+($45,000*0.06/12)*(1/31)
=$87.90  

You should have only 23 days at 20k, not 26 days. Two days at 45k is fine.

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