Early closure charge calculation - santander 4% ISA fixed term

hiohaa

so im 1 year into my 4% fixed ISA with Santander.
i reckon i might have to pull out at some point and take out all of the money i put in (that 5340 sum)

how is the charge calculated? it says

Access to funds will be allowed on account closure only subject to an early closure charge equivalent to 120 days' interest.

equivalent to 120 days interest? is that 5340 at the AER of 4%, so

5340 x 1 year @ 1.04 = 5553.6
4%/365 x 120 = 1.315%

1.315% x 5553 = £73 charge for early closure

that can't be right can it?

innovate

I'm afraid, £73 is in the right ballpark if you had £5,340 in the ISA from day one.

4% of £5,340 is £213.60. That's your interest for 365 days, about 59p a day. £70.22 for 120 days.

Still leaves you with approx 2.6% AER for the last 12 months, and steadily a bit more for every additional month you can hang on in there (until about 4 months (120 days) from maturity, when you effectively wouldn't get any more interest if you ended up withdrawing).

If you need just some of your £5,340, you can set up a new ISA that allows transfers in. You'll still pay the 120 days penalty but you would keep a bit of your money in the ISA shelter.