Penalty calculations?

vigman

ISA accounts with penalties for withdrawal state that depending on when you withdraw you may get back less than you have invested.

Has anyone here calculated rates and penalties for the 5640GBP cash ISA to work out when this would be the case, please??

eg
90 days interest penalty @ 3%
120 days interest penalty @ 3%
90 days interest penalty @ 3.5%

TIA

Vigman

HappyMJ

vigman wrote: »

ISA accounts with penalties for withdrawal state that depending on when you withdraw you may get back less than you have invested.

Has anyone here calculated rates and penalties for the 5640GBP cash ISA to work out when this would be the case, please??

eg
90 days interest penalty @ 3%
120 days interest penalty @ 3%
90 days interest penalty @ 3.5%

TIA

Vigman

Do not lock up your money if you any chance of ever withdrawing early. It's not worth it. A standard easy access savings account would have paid more. Only invest in a fixed term ISA if you know you will not need the money for the term of the investment.

Moist_von_Lipwig

If number of days the account was open is less than the number of days of penalty interest then you would get less back than you deposited.

If the number of days the account was open is equal to the number of days of penalty interest then you get your initial deposit back.

If the number of days the account was open is greater to the number of days of penalty interest then you get your initial deposit back plus some interest payment.

Joe_Bloggs

Some figures:-
On £5640
90 days interest / penalty @3% £41.25
120 days interest / penalty @3% £55.08
90 days interest / penalty @3.5% £48.05

My latest fixed year ISAs were created by partially transferring past years contributions from an instant access ISA into two fixed ISAs. These have a three year and two year maturity with 270 day and 180 day interest penalties.

I will still have a lifeline to the remaining money in the instant access ISA whilst I build up savings in conventional savings accounts towards future bills and future cash ISAs.

Overtime the fixed ISAs will become low interest instant access versions. I can then choose to reallocate the money between whatever fixed rates and terms are available at that time. I aim to have a cash ISA maturing every six months.

J_B.