Monthly or annual interest

mavis_muriel

Just about to open a cash isa. However the form asks for the interest to paid monthly or annualy. Which is best?

regularsaver1

thats odd

interest on an isa is usually only paid overnight 5th april, ready for 6th april

on savings accounts in general though - annual usually pays more than monthly

mavis_muriel

Thanks for prompt reply and advice. I thought as much but it's best to check from those who know!

sloughflint

regularsaver1 wrote:

thats odd

interest on an isa is usually only paid overnight 5th april, ready for 6th april

on savings accounts in general though - annual usually pays more than monthly

Not always. Nationwide 31/3 and Halifax 1/4.

nigel2smooth

how much interest on avarage should an isa pay then per year

YorkshireBoy

regularsaver1 wrote:

thats odd...interest on an isa is usually only paid overnight 5th april, ready for 6th april

In addition to sloughflint's Nationwide & Halifax interest payment dates, A&L is 1st Jan, LTSB is 31st March, and B&B is 31st July...what do you mean by "usually only paid overnight on 5th April"?

on savings accounts in general though - annual usually pays more than monthly

If both quote the same AER, then both will pay the same interest annually - surely? However, IIRC the maths wizards on here (Dagobert & Grumbler I believe) have proven by calculation that the annual option is 'pennies' better than the monthly option due to the earlier taxation on the monthly option. Is this what you mean?

Stompa

I thought it was fairly standard for cash ISA's to offer either annual or monthly interest?

Stompa

regularsaver1

i thought that for isa's you do not receive the interest unitl the end of the tax year?

Stompa

i thought that for isa's you do not receive the interest unitl the end of the tax year?

Nope, all my ISA's pay me interest monthly.

Stompa

ffacoffipawb

sloughflint wrote:

Not always. Nationwide 31/3 and Halifax 1/4.

... and Intelligent Finance, monthly on the 1st.

ffacoffipawb

YorkshireBoy wrote:

However, IIRC the maths wizards on here (Dagobert & Grumbler I believe) have proven by calculation that the annual option is 'pennies' better than the monthly option due to the earlier taxation on the monthly option. Is this what you mean?

Tax is irrelevant for an ISA!