which monthly interest account is best?

Karfy

hi there,

i was just wondering if anyone could give me some advice or point me in the right direction with monthly interests accounts or another account if that sounds best. basically i have £12,500 that i want to save but possibly after 3 months will take about £1500. because i want to take this money out would it be better to have a monthly interest account so i get the interest on the full amount in those 3 months? im disabled/ill and cannot work so do not pay tax does this mean i would get the gross p.a/AER rate rather than the annual equivalent rate? im just a bit confused with what interest rate you actually get as there seems to be several listed in a row on some banking websites and i dont know which is the actual interest rate you get?

if anyone could answer any of my questions or give me some advice that would be great!! thanks very much, Karfy xxxx

innovate

Karfy, have you worked through the relevant articles from Martin?

Whether you choose monthly or annual interest shouldn't matter too much - it only determines when the interest gets credited to your account, you still get the interest calculated on a daily basis. In all cases, after 12 months, you will receive the AER (with or without tax withheld)

The standard procedure for banks is to withhold tax at the basic rate from interest payments. If you don't need to pay tax, you can usually ask the bank not to subtract tax, by furnishing them with evidence of your tax excemption.