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Calculation of Interest on ISAs
Close_Saver
Posts: 17 Forumite
Hi Folks
May seem like a daft question but, is interest paid annually or only at the end of the period. For example, is it compound interest?
May seem like a daft question but, is interest paid annually or only at the end of the period. For example, is it compound interest?
Dave
0
Comments
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Depends on the specific account.0
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If I have a Fixed Rate ISA for 3 years paying 4% with £5000 deposited, do I get 4% of £5000 at the end of 1 year (total of £5200), then another 4% of £5200 at the end of the second year (total of £5408) and then finally 4% of £5408 at the end of the third year totalling £5616.32? Or do I only receive 4% of £5000 at the end of 3 years i.e.a total of £5200?Dave0
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If the AER is 4% then interest is added in the way you describe.0
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