Tutorial

OVO interest reward - what it is, how much, how it's calculated: DIY tutorial series

  • 16 October 2020
  • 5 replies
  • 214 views
OVO interest reward - what it is, how much, how it's calculated: DIY tutorial series
Userlevel 7

What is the OVO Interest Reward - your guide

 

The basics:


The OVO Interest reward is in place to reward customers who keep their account “healthy” and in credit.  

The current annual rate of reward is 3% for the 1st year a customer is with us, increasing to 4% in the second year and then 5% for the 3rd year and following years. The tiered Interest Reward was introduced on 30/06/2017.

Every time a statement is produced for the account, interest earned for the period is calculated and added to the bill. If the account balance is not in credit no interest will be awarded.

How is the Interest Reward calculated?

 

The OVO interest reward is calculated the day before a Direct Debit is taken using the balance on that day.


This is the calculation of how the OVO Interest reward is worked out: 

"(days since Last Calculation / 365) * Balance Prior To Payment * interest Reward Percentage"

Example:


You have a balance of £100 when your previous Direct Debit was taken. Your last payment was taken two days ago and your level of OVO interest reward is 5%. 
= 2(days) /365 x £100 x 0.05 (interest percentage) = £0.027 (rounded up to £0.03)
 

Where can I see this OVO Interest reward payment?

 

The interest reward payments will show in the ‘Charges’ section of your online account, shown here:

 

 

Why can I see a low Interest Reward amount for the month after I went onto the new billing platform?


This is because in the first month of being on the new online account/billing platform, the OVO Interest reward is calculated from payment to payment and not for a calendar month, so you might have your first OVO interest reward payment calculated just a couple of days after being migrated. 

 

How is the OVO Interest Reward calculated if I’m on the old billing platform:

 

The OVO interest reward is calculated using the credit balance brought forward from the previous statement.

 

 

That’s it for our guide on the OVO Interest Reward. Missed something? Let us know in the comments section below! 


5 replies

Userlevel 5
Badge +1

Cheers for the info @Tim_OVO & yes I still have an open complaint,

I’m keeping that open until at least my next statement has been produced & is correct.


All I need now is confirmation of my findings of the interest reward paid or not paid In my case from my old statements ? Lol

Userlevel 7

@alpo did we help you figure out this interest reward calculation in the end? 

 

As @Blastoise186 mentioned “days since last calculation” is the number of days since last month’s statement/summary basically. That interest is paid monthly. 

 

@TomThumb I will make sure you don’t miss out on interest. That would be very unfair, especially as it has been our internal billing platform issues that have prevented a nice straightforward monthly bill and interest. 

 

Am I correct in thinking your complaint is still open with us? I would recommend you raise this with your complaint handler so it can be factored in. 

Userlevel 5
Badge +1

As my first 12 months with Ovo is drawing near, I thought I would share my experience of the interest reward thus far!

As I’m only currently in receipt of the 3% reward, my grand reward to date is a total of zero £00.00 

My balance is healthy & I’ve never missed a payment, 

 

To be fair to Ovo, they had been paying my interest reward every month up until last month, but due to account changes made last week by Ovo, any interest reward given, has now been withdrawn back into Ovo’s coffers.

 

At a guess, the total interest reward I would have gained is sub £10 so it’s more the principal of the scheme than the actual value that raises concerns.

 

My absolute best guess would be £6.50 to £7.50 of interest reward I am missing out on, but as Ovo have currently lost all my previous statements, who knows.


Tom...

Userlevel 7
Badge +3

Hi @alpo .

OVO pays out the reward monthly, in a similar way that a bank which pays out monthly interest does, and it’s based on the account balance at that time. The best way to benefit would be having the account in credit for as many months as possible during the year - simply dumping loads of credit in at the end of the year.

Please can you explain the bit about "(days since Last Calculation / 365) * Balance Prior To Payment * interest Reward Percentage"

What is “days since last calculation”? It seems like this is the most important feature of the calculation and this determines how much money you receive. 

The example you give is not fully clear on this. 

(You have a balance of £100 when your previous Direct Debit was taken. Your last payment was taken two days ago and your level of OVO interest reward is 5%. 
= 2(days) /365 x £100 x 0.05 (interest percentage) = £0.027 (rounded up to £0.03))

Is this day 2 of your billing period over the year? So if you had £100 balance at the end of the year, then you would get 5% of £100 (£5) 

If so, could you top up your account at the end of the year to leave a £100 balance and get £5 back? Or is it having a continuous balance of £100 throughout the year that will get the £5?

Many thanks

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