Trying to work out the correct interest.

isayhello

Hi,

If an ISA was kept open for 10 months at a rate of 1% and had 14600 in it the whole time, would you expect to get £146 for 12 months, and £146 - (14.60*2) for 10 months?

Or does the interest work a bit differently to that if you take your money out 2 months earlier.

It's not a fixed term account.

Thanks

Lokolo

That is correct. Although interest is worked out daily, so you'd actually need to use the number of days and use the daily rate to find the exact amount, but for approximations, months is fine.

opinions4u

isayhello wrote: »

Hi,

If an ISA was kept open for 10 months at a rate of 1% and had 14600 in it the whole time, would you expect to get £146 for 12 months, and £146 - (14.60*2) for 10 months?

Or does the interest work a bit differently to that if you take your money out 2 months earlier.

It's not a fixed term account.

Thanks

You're right for a year and wrong for 10 months.

£146 x days / 365 will provide the precise answer needed. The £14.60 I've bolded above is incorrect. The figure you should have there is £146/12 which is £12.17.

isayhello

Thanks for your replies, the bank had only worked this out to be around £90 which just didnt seem right to me.

dtaylor84

To get a [STRIKE]price[/STRIKE] precise answer you need to know:

Is the interest paid monthly or annually?

Was there a penalty for withdrawing early?