monthly interest

aljh

does anyone know...

are you allowed to transfer money in and out of an isa each month? e.g. if i deposit £1000 a few days before interest is calculated then remove it afterwards, will the interest be calculated on that new temporary total amount and how many times could this be repeated?

Kazza242

aljh wrote:

does anyone know...

are you allowed to transfer money in and out of an isa each month? e.g. if i deposit £1000 a few days before interest is calculated then remove it afterwards, will the interest be calculated on that new temporary total amount and how many times could this be repeated?

Interest is calculated daily, so if you had £1000 in the account for only 3 days, then you would only receive 3 days' worth of interest - not a whole years worth.

It's also worth remembering that once you withdraw funds from a mini cash isa, you cannot deposit it back in again. For example, if you have £1,000 in your isa (that you deposited this tax year) and you withdrew it, you would only be permitted to add £2,000 and not £3,000 into your account. Therefore, £1,000 of your cash isa allowance would be lost forever.

I can't really see the point in doing what you've suggested. It's a lot of hassle to go through for a few extra pennies. Why not save up a lump sum and deposit it into your isa when you can and leave it there or pay in what you can afford each month.

MarkyMarkD

It's a lot of hassle to go through for NO extra pennies, I think you mean.

Kazza242

MarkyMarkD wrote:

It's a lot of hassle to go through for NO extra pennies, I think you mean.

LOL, that's what I meant exactly. My post above was me trying to be polite . I must admit, I'm surprised at the number of people that think sticking money in just before interest is paid will result in a full years worth of interest.

MarkyMarkD

Yes, I think it's confusion between "paid" monthly or annually and "calculated" monthly or annually.