ISA - Annual or Monthly interest

bronzie

In an ideal world should I opt for an ISA which pays interest on an annual or monthly basis?

I would have thought that it would be best to have monthly in case I have to transfer away before it reaches maturity but I recall reading somewhere that the egg isa at 6.05% on a yearly basis is a good one to opt for.

Am a bit confused now, having read the problems associated with Barclays and Icesave ISA's egg, from what I could see, was the next best one.

Any help appreciated
Thanks

Masomnia

There really isn't any difference between monthly and annual, it works out the same interest over the year, and if you do close the account and transfer the money you're given the interest you've earned so far, even if it is before the year's end.

As for which ISA to go for, I can't speak for Barclays or Icesave, but I do have an Egg ISA and never had any trouble with it whatsoever.

YorkshireBoy

Unless you need the interest to supplement your income, then it makes no difference whether the interest is paid monthly or annually - so long as the quoted AER's are the same.

bronzie

Thank you for the responses, don't need the money no, saving for a long term goal, shouldn't need it for at least a year.

Got myself a new job recently, it's a contract role but likely to go permanent at the end, so I thought I would sort out my finances while I can and try and save some.

Got myself a new current account too, moving from Smile, I have learnt a lot about myself throughout this process - primarily how risk adverse I am!

talana

My ISA is with Icesave and I've gone for monthly interest.

As the others have said, makes no real difference whether you go for monthly or annually. However I prefer monthly for psychological reasons, it encourages me to save more when I can see interest being added (and gradually increasing) every month!