|
|
Post by trilby on Sept 1, 2016 11:46:37 GMT
No because in general interest payments are upto the last day of the previous month. So parts sold on the 1st should post 1 day of interest; just as parts sold on the 2nd post (correctly) 2 days of interest etc. (I cross check every single interest payment on SS for accurcay as the previous software incarnation was riddled with errors) What you're experiencing there is the other interest calculation bug  I've also written a process that reconciles every payment and this had me scratching my head for quite a while! This is how much interest you would have received for buying/selling a part on these dates: Buy 31/7, Sell 1/8: 1 day interest paid on 1/8, no interest paid on 1/9 Buy 31/7, Sell 2/8: 1 day interest paid on 1/8, 2 days interest paid on 1/9 Buy 31/7, Sell 3/8: 1 day interest paid on 1/8, 3 days interest paid on 1/9 Clearly that doesn't make sense but it is what happens. In fact only the first of these is the correct behaviour (one day's interest for holding the part for one day) while the others are incorrect (e.g. three days' interest for holding the part for two days). It seems that what's happening is that interest is calculated up to the first day of the current month when buying a part, but calculated from the last day of the previous month when selling a part, so one day is being double counted. The exception to this is when you sell a part on the first of the month, when this bug doesn't happen. If you buy and sell a part within the same month then there is no problem and the interest is calculated correctly. While this is a relatively subtle bug it's a bit worrying that SS haven't noticed it. But again, it's an error in our favour so I'm not going to press the matter!
|
|
n
Member of DD Central
Yet another Nick
Posts: 881 
Likes: 461
|
Post by n on Sept 1, 2016 11:55:29 GMT
Does it make any difference if the sale on 1st completes before or after the interest gets paid out?
|
|
|
|
Post by trilby on Sept 1, 2016 12:20:47 GMT
Does it make any difference if the sale on 1st completes before or after the interest gets paid out? For the missing payment bug, it's not clear whether that makes a difference. In my case I put the parts up for sale before the interest payment run and the sale completed afterwards. According to SS the bug is fixed, so hopefully it won't affect anybody again - if you did sell a part today before the interest run (around 9am) then I'd check the interest payment on it to be sure.
|
|
twoheads
Member of DD Central
Programming
Posts: 1,089
Likes: 1,192
|
Post by twoheads on Dec 6, 2016 17:11:06 GMT
I've also written a process that reconciles every payment and this had me scratching my head for quite a while! This is how much interest you would have received for buying/selling a part on these dates: Buy 31/7, Sell 1/8: 1 day interest paid on 1/8, no interest paid on 1/9 Buy 31/7, Sell 2/8: 1 day interest paid on 1/8, 2 days interest paid on 1/9 Buy 31/7, Sell 3/8: 1 day interest paid on 1/8, 3 days interest paid on 1/9 Clearly that doesn't make sense but it is what happens. In fact only the first of these is the correct behaviour (one day's interest for holding the part for one day) while the others are incorrect (e.g. three days' interest for holding the part for two days). I've been trying to work out why I always receive a little more interest than I expect.
Of course I made the obligatory spreadsheet to calculate interest and found that SS sometimes pay an extra day's interest on a loan part. I worked out that the extra day's interest is added on any loan part sold during the month but which was bought in a previous month.
I then trawled the forum to see if this had been noticed before. Of course it had!
However, unlike the observation of trilby , above, I also receive the extra day of interest if I sell on the 1st of the month.
Example: on Oct-25 I bought £100 of PBLxxx. I sold this on Nov-01. In the October interest I received 7 days worth (£0.23) and in the November interest I received a further 1 day (£0.03).
If I export the transactions for my account to Excel, the loan part in question correctly states that it is a seven day loan part and that the interest is, correctly, 23 pence.
This extra day of interest is given by SS on every sold loan part which was bought in a previous month. Only by including this extra day do my interest calculations perfectly match those of SS.
Of course, the more you buy and sell on the SM, the more likely you are to receive odd extra days. I 'play' a lot. My average return is actually 12.168%
Keep it quiet.
|
|
|
|
Post by trilby on Dec 7, 2016 15:02:05 GMT
I think it might depend on whether you sell the part on the first of the month before the interest run has happened, or on the first of the month after the interest run has happened. The former probably doesn't pay the bonus day of interest in the subsequent interest run while the latter probably does.
|
|
twoheads
Member of DD Central
Programming
Posts: 1,089
Likes: 1,192
|
Post by twoheads on Dec 7, 2016 16:26:00 GMT
I think it might depend on whether you sell the part on the first of the month before the interest run has happened, or on the first of the month after the interest run has happened. The former probably doesn't pay the bonus day of interest in the subsequent interest run while the latter probably does. I don't think it matters because you get the interest for the extra day in the following month's run:
1. I buy PBLxxx on Oct-31. 2. I carry it into Nov-01. 3. The October interest run happens early on Nov-01 and I get 1 day's interest in the October run for holding the loan part at midnight at the end of Oct-31. This is normal. 4. I sell the loan part on Nov-01. 5. In the November interest run (early on Dec-01), I receive one day's extra interest which I shouldn't.
If I sell on Nov-01, I should get no interest in November: having bought on Oct-31, I've held the loan part for one day and already received that day's interest (assigned to Oct-31) in the October run. If I sell on Nov-02, I should get one day's interest in November. This will be the interest for Nov-01. I wrongly receive 2 day's interest. If I sell on Nov-03, I should get two day's interest in November. This will be the interest for Nov-01 and 02. I wrongly receive 3 day's interest.
...etc... If I sell on Nov-30, I should get 29 day's interest in November. This will be the interest for Nov-01 up to and including Nov-29. I wrongly receive 30 day's interest. If I sell on Dec-01, I should get 30 day's interest in November... and I do. (I should get none for Dec-01... but at the end of December I will get interest for Dec-01).
The daily interest is, I think, paid at the end of the day on any loan part held as the clock reaches midnight. The interest is assigned to the day that's just ended. You don't get a day's interest for the day on which you sell a loan part.
The one example I don't actually have is a one day loan which spans a month end. I have various two and three day loans that span a month end and also some which span two month ends. All these have had interest payments exactly as described above: the loan part interest amounts match precisely.
For every loan part you sell which was bought in a previous month, you receive an extra day's interest.
Next time a loan part comes up on the last day of the month I will buy it (if its big enough to show a one day interest payment) and then sell it the next day. I won't know the answer to this test until at least Feb 1st 2017. However, I expect a single day's interest in each of the two months involved.
Of course, SS may fix this sometime soon. My spreadsheet will tell me if and when that happens.
|
|
twoheads
Member of DD Central
Programming
Posts: 1,089
Likes: 1,192
|
Post by twoheads on Dec 7, 2016 16:47:45 GMT
If you put a loan part up for sale on the 1st August, are you not entitled to zero days interest as you haven't held past midnight? No because in general interest payments are upto the last day of the previous month. So parts sold on the 1st should post 1 day of interest; just as parts sold on the 2nd post (correctly) 2 days of interest etc. (I cross check every single interest payment on SS for accurcay as the previous software incarnation was riddled with errors) locutus is correct. You do not receive interest credited for the day on which you sell any loan part.
You receive interest for any loan part held as the clock ticks midnight and that interest is credited to the day that's just ended, not the day that's just starting.
A loan part bought on Nov-30 and sold on Dec-01 shows one day's interest in November (for Nov-30) and should show no December interest. In total, you should receive one day's interest.
There is currently a bug which means that such loan parts also receive an extra day's interest payment for Dec-01. I've received many extra days worth of interest due to this issue.
It could be that this bug is a result of SS 'fixing' the issues raised at the top of this thread.
I only started investing in SS in late September so I don't have figures from before then to test any hypotheses.
|
|
twoheads
Member of DD Central
Programming
Posts: 1,089
Likes: 1,192
|
Post by twoheads on Dec 7, 2016 21:11:01 GMT
I haven't looked at mine but accept what you all say probably applies. I forecast a frenzy of buying bits of tat on the SM on Hogmanay just to see. We wish you... and a happy new year!
Perhaps I should sing 'prosperous'?
Well, it doesn't quite scan but you can just about get away with it.
Let's hope for prosperous. That would be good.
|
|
twoheads
Member of DD Central
Programming
Posts: 1,089
Likes: 1,192
|
Post by twoheads on Dec 8, 2016 22:20:39 GMT
The figure I stated of 12.168% is the rate SS have actually paid (on my lending up to Nov-30) and is directly comparable to the quoted 12%. (I have only invested in 12% loans).
Imagine my investments should have paid exactly £120.00 in interest when each loan part is allocated the correct number of days (without any extra days).
With the extra odd days of interest that SS have donated on various loan parts, I have actually received £121.68.
This is the basis of my quoted figure.
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Dec 8, 2016 22:25:13 GMT
I was expecting my rate of return to be over 12% because of interest reinvestment - 1.01^12 -> works out to be 12.68%. I was a bit surprised to see 12.73%, even with some partially uninvested periods, I guess this explains it (although I should really check...). : Have you been with SS long enough to have received any cashback that would have increased your return? If not, I'd suggest that the difference might be due to rounding of interest payments, especially if the amount invested is relatively small. Or perhaps a difference caused by how you calculated your return. (I have been told that Excel's XIRR function isn't perfect, but I don't know under what circumstances it might produce imperfect results.)
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Dec 8, 2016 22:29:50 GMT
Other possibilities might include... - 2016 was a leap year. Do we earn 366/365 of the quoted rate this year?
- An occasional negative balance, during which time we earn interest on parts we haven't paid for yet.
- Edited to add: Parts sold on the first day of a month (the subject of this thread)
|
|
twoheads
Member of DD Central
Programming
Posts: 1,089
Likes: 1,192
|
Post by twoheads on Dec 9, 2016 8:51:36 GMT
Other possibilities might include... - 2016 was a leap year. Do we earn 366/365 of the quoted rate this year?
- An occasional negative balance, during which time we earn interest on parts we haven't paid for yet.
- Edited to add: Parts sold on the first day of a month (the subject of this thread)
It's definitely based on 365 day year at present (at least since I started investing in September this year). If I change my spreadsheet to use 366 days then my figures do not match those of SS.
It would also not be unusual if the leap year day was inserted into the tax year Apr-2015 to Mar-2016. Of course, my investments in to SS don't go back far enough to check this.
SS sometimes round the sum of unrounded figures: e.g. the sums of your total interest at the bottom of your live, selling, sold and repaid loan parts. Of course, when you export to spreadsheet, each loan part interest is rounded individually meaning that the sum in your exported tables is not the same as that shown in the sums online in the website. In both of the cases above, the rounding always matches what I calculate.
They have another trick during the interest run: sometimes the SS system groups together your small loan parts (for one property) and pays all the interest for the group on a single, chosen, loan part, paying no interest on the others in the group. This allows them to reduce the accumulated rounding errors. I haven't worked out their system for doing this! Edit: the loan parts with no interest paid seem to be those created when some, but not all, of a loan part is sold. The 'partial' sale causes a new loan part to be created: the sold part, while the live part remains but with its value reduced. However, the interest due for the sold portion appears to be added into the live part during the interest calculation run, the sold part receiving no interest.
This can be verified by matching the interest payments downloaded from 'my account' against the loan parts for which they apply... easily done with a little spreadsheet magic.
|
|
I've also written a process that reconciles every payment and this had me scratching my head for quite a while!
