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ISA Interest Query
vpdanas
Posts: 32 Forumite
How does the interest paid by an ISA provider work if you change provider?
Nationwide current offer 2.25% but openly admit its a bonus rate and will reduce to 0.5% on 1/11/13.
Therefore if I started saving with Nationwide I would look to change to a more competitive rate just before then but my query is how does the interest earned up to then get paid?
Nationwide pay their interest annually (financial year). But if I move do I still get interest up to the point I moved? If so how if I've moved? If not and find a new provider I stay with at a higher until end of financial year i'll only get interest from when I jined them right?!
Therefore am I best finding a good rate and just staying with them even if the rate drops to get a full years interest?
The idea of the interest paid after you've moved is confusing me a bit so any clarity on any of this would be much appreciated.
Nationwide current offer 2.25% but openly admit its a bonus rate and will reduce to 0.5% on 1/11/13.
Therefore if I started saving with Nationwide I would look to change to a more competitive rate just before then but my query is how does the interest earned up to then get paid?
Nationwide pay their interest annually (financial year). But if I move do I still get interest up to the point I moved? If so how if I've moved? If not and find a new provider I stay with at a higher until end of financial year i'll only get interest from when I jined them right?!
Therefore am I best finding a good rate and just staying with them even if the rate drops to get a full years interest?
The idea of the interest paid after you've moved is confusing me a bit so any clarity on any of this would be much appreciated.
0
Comments
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Generally when you close an account the interest is calculated and paid, so it would be included in the transfer.
There have been savings accounts that don't pay bonus until the anniversary, but I don't know that any of them are ISAs. If they were, they'd get MSE and Which etc saying "avoid like the plague"."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
It is normal that ISA rates drop after a certain time - 12 months, 18 months, end of fixed term etc.. There is nothing unusual at all about this, and it doesn't impact a "best buy" rating.
When you request an ISA transfer (with the new provider), the old provider will in all cases send the earned interest to the new provider, along with the balance, of course. Interest ona ll savings accounts (which includes ISAs) is calculated on a daily basis.
If you request a transfer of ISA money that you deposited in the current financial year, you must transfer all of it. Previous years deposits can be transferred in smaller chunks.
So if you open the Nationwide ISA now and want to transfer in November, you must request transfer of the entire ISA. Nationwide will then calculate a closing balance by adding the interest you have earned until then, send the money to you new provider, and close the ISA.0 -
There have been savings accounts that don't pay bonus until the anniversary, but I don't know that any of them are ISAs. If they were, they'd get MSE and Which etc saying "avoid like the plague".
The Santander Major ISA is one example of an ISA that doesn't pay the bonus until maturity (end of 2 years). It's a tiny bonus of 0.1% though. But it has been in everyone's "top buy".0 -
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Cheers for all the info folks...most helpful.
I've gone with the Newcastle BS one at 3% (1% bonus ,providing I stick to terms of no withdrawal and monthly deposit) ... Seems good.
Thanks again for advice.0
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