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Calculation of Interest on ISAs
Close_Saver
Posts: 17 Forumite
Hi All
It may seem a daft question but, is the interest on fixed rate ISAs calculated compound.i.e at the end of each year then added to the total yearly amount?
It may seem a daft question but, is the interest on fixed rate ISAs calculated compound.i.e at the end of each year then added to the total yearly amount?
Dave
0
Comments
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Dave_Steels wrote: »Hi All
It may seem a daft question but, is the interest on fixed rate ISAs calculated compound.i.e at the end of each year then added to the total yearly amount?
If you have £10,000 in a 3 year bond at 3.5%.
You'll get £350 in year 1, then £362.25 in year 2, then £374.93 in year 30 -
Generally, yes. Some providers offer you a choice: you can have the interest paid into another account or you can have it added to your ISA. The latter is the better option unless you need the money, as it then becomes part of your ISA savings and continues to earn interest tax-free.0
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