Interest Calculation

Aark

The best way to illustrate my question is with an example:-

You deposit £10,000 in a savings account on 31 July 2005. Interest is paid annually, on 1 July. You withdraw the £10,000 on 31 January 2006.

Would you get more interest on 1 July 2006 than you would on closing the account at 31 January 2006?

Sillychuckie

No.
Interest on £0, is funnily enough, £0.
Unless, in the Ts&C's, it states that closing your account early/within a fixed rate period etc incurs a fine/loss of interest, there is no advantage to leaving it open until July.
They will pay you the interest due whenever you close it.

grumbler

Sillychuckie wrote:

No.
Interest on £0, is funnily enough, £0.

Although I agree that the answer is most likely 'No', there is no anything funny in the question. When you withdraw £10K in Jan there is some interest accrued untill this moment (not added yet) an left on the account. This interest can probably accrue some more interest if left untill next Jan (interest on interest). However, as I understand, this could happen only if interest is paid monthly, not annually.