Do Icesave calculate interest daily?

tinkerbell84

Can't find an answer on their website.

I have an easy access ISA which I need to withdraw. Offset mortgage should start on 1st Oct. Icesave pay my interest monthly on the 5th of each month.

If they calculate interest daily, I'll withdraw it in time for the offset. If it's calculated monthly I'll leave it there till the 5th.

Anyone know?

YorkshireBoy

See condition 11c

[Deleted User]

Tut, no link...

11c. Subject to conditions 11j, 11k & 11l, interest is calculated on a daily basis on the account balance. If you ask us, we will provide you with a written example of how interest is calculated.

http://www.icesave.co.uk/downloads/ICE_2008_V11_0808.pdf

I think it'd be fair to say that 99% of banks calculate daily however it's when they pay that varies.

sloughflint

tinkerbell84 wrote: »

Can't find an answer on their website.

I have an easy access ISA which I need to withdraw. Offset mortgage should start on 1st Oct. Icesave pay my interest monthly on the 5th of each month.

If they calculate interest daily, I'll withdraw it in time for the offset. If it's calculated monthly I'll leave it there till the 5th.

Anyone know?

Your ISA rate is 6.1%. Are you sure it is the right thing to do? If your mortgage rate is less than this, it would be better to leave the cash in the ISA.Once the money is withdrawn, you can't put it back in.

tinkerbell84

sloughflint wrote: »

Your ISA rate is 6.1%. Are you sure it is the right thing to do? If your mortgage rate is less than this, it would be better to leave the cash in the ISA.Once the money is withdrawn, you can't put it back in.

I'm a higher rate tax payer. Mortgage rate is 5.49%, so I'd need something like 8-8.5% interest to make it worth leaving there.

I have a regular saver at Lloyds that gets 8%, so that's staying there till it matures in January

Thanks though.

sloughflint

But the ISA is tax free tinkerbell:6.1>5.49
Leave it in there.

I agree with the taxable accounts though.

YorkshireBoy

tinkerbell84 wrote: »

I'm a higher rate tax payer. Mortgage rate is 5.49%, so I'd need something like 8-8.5% interest to make it worth leaving there.

Not in an ISA you wouldn't. Your interest isn't taxed...remember.

You're giving up the chance to make 6.10% AER so that you can save only 5.49% APR.

My advice (and it looks like I'm not alone) is to think again.


Edit: To give you some specifics...

£10,000 in your ISA will make you £610 over the year
£10,000 in your offset will save you ONLY £549 over the year

You're going to be £61 worse off!.

Even if you had their standard BOE + 0.79% offset, you'd still be £31 a year worse off.

And don't forget your annual ISA allowance is a use it or lose it allowance.

sloughflint

tinkerbell84 wrote: »

I'm a higher rate tax payer. Mortgage rate is 5.49%, so I'd need something like 8-8.5% interest to make it worth leaving there.

The break even rate is 9.15% for taxable accounts ( 5.49/0.6)

tinkerbell84

I'm not making 6.1% - the interest rate on the ISA is 5.94% so there's not much in it.

tinkerbell84

sloughflint wrote: »

The break even rate is 9.15% for taxable accounts ( 5.49/0.6)

I knew it was higher than anything you could get on a savings account

Thanks!

YorkshireBoy

tinkerbell84 wrote: »

I'm not making 6.1% - the interest rate on the ISA is 5.94% so there's not much in it.

You're not comparing like-with-like.

You need to compare AER with APR.