Is there any difference??

kimfarren

Ive got 30K I want to put away into a 1 year fixed bond.

Birmingham midshires have 2 on offer at the mo. A 1 year fixed AER 7.17% interest paid annually. The second is a 1 year fixed, Gross pa 6.94%, Net 5.55% AER 7.17% interest paid monthly.

I am a non taxpayer and will pay all of the 30K in at the beginning of the term with no deposits during the year. Is there any difference for me in the above 2 accounts?

Thanks Kim

debbie42

In terms of the actual total interest paid, there isn't a difference, as long as with the monthly interest paid you left the interest in the account to compound.

There are sometimes tax advantages to having interest paid at different times, but if you won't pay tax on the interest this shouldn't matter. Just make sure you fill in the R85 forms!

kimfarren

Thanks Debbie.