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Fairly basic question on annual interest
sjwk
Posts: 10 Forumite
Say I have an ISA that, for example, advertises it only pays interest on 1st March each year. I close the ISA on 1st April a year after opening it. What happens with the interest that had accrued in the final month in between their annual payout and my closing the account?
I'm assuming I don't simply lose it? But do the bank then calculate and pay the interest at the point when I close the account? Or do I need to leave the account open with £1 in it for another 11 months so that the interest gets paid?
Just wanting to check...
Steve.
I'm assuming I don't simply lose it? But do the bank then calculate and pay the interest at the point when I close the account? Or do I need to leave the account open with £1 in it for another 11 months so that the interest gets paid?
Just wanting to check...
Steve.
0
Comments
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When they close it they will add another months interest.
In this case it will be 31/365ths of the annual figure because there are 31 days in March.
The name for it is "pro-rata".0
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