872 • Minimum investment amount £1.
874 • Financial promotion published on 14 February invites customers to subscribe to the
875 product with a closing date of 14 March.
877 • Product first investment date is 1 April.
879 • Any application monies are initially placed in a holding account which pays a lower
880 rate of 2% prior to being invested into the product on 1 April from when the standard
881 rate of 3% (variable) applies.
883 • For the purposes of the AER calculation under Guideline A7 the ‘specified date’ on
884 which funds are first expected to be received for the purpose of the AER calculation
885 is 14 February, which assumes customers are able to submit funds with their
886 application online on the first day the advertisement appears.
888 • AER is a blended rate of 2.87% (calculation is 2%*(46/365)+3%*(319/365)).
890AER Guideline A6 - Worked Example 2
894 (including Conditional
897ONLINE SAVINGS 2.95% N/A
899 Blended rate based on
906 • Same savings product as AER Guideline 6 - Worked Example 1 above but with no
907 closing application date.
909 • Under existing AER Guideline A7 the original financial promotion published on 14
910 February must be updated with a refreshed AER after 14 March. The proposed
911 revision to AER Guideline A7 permits the existing financial promotion to continue to
912 be used in the market as the quoted AER of 2.87% would be lower than a
913 recalculated AER of 2.95%.
915 • For example - the recalculated AER to be used in a revised financial promotion to be
916 issued on 15 March, with a specified date of 15 March, would be 2.95% (AER
917 calculation is 2%*(17/365)+3%*(348/365)) and from 1 April onwards the
918 recalculated AER would be 3%.