Closing a Halifax Fixed Isa Early

Helene87

Hello,

I'm hoping that someone will be able to offer me some advice on this...

I'm (hopefully) buying a house within the next few month. I wasn't really planning on buying a property this year, but an opportunity came up which I did not want to miss out on. However, in order to make the deposit, I'm going to have to shut my 1 year Fixed Halifax ISA which I opened just over 1 month ago.

Having looked at the Halifax T & C, I know that closing the account early means that I will "lose an amount equal to 90 days tax-free interest". By my reckoning, that means that I will get out less than I put in...but here is the bit that confuses me...(and I cannot get a straight answer from Halifax, no matter how hard I try).

Will Halifax just take 90 days interest off of my initial deposit, and then return that figure to me?

Or will Halifax take 90 days interest - the number of days that my account has been open for when I finally close it. For example: If I closed it today, would they take (90 days interest - 40 days interest) = 50 days interest. In this case, it would obviously make sense to try to keep my account open for as long as possible.

I hope this question makes sense. Two Halifax workers have given me two different answers to this, so i was wondering if anyone knew from experience.

le_loup

Sounds like, and for most accounts it would be, you lose 90 days interest. No pro-rating for time open.

Helene87

OK, thanks for the advice. Good to know

The first person I spoke to at Halifax told me that I would get 40 days interest for example, then they would take the 90 days off of that balance.

I wasn't so sure if this sounded right, and asked another person on their live chat system, and they just kept copying and pasting the term that should read the T & C's for clarity. But since I was asking them for clarification on how the T & C worked, it didnt help me much.

Archi_Bald

Helene87 wrote: »

The first person I spoke to at Halifax told me that I would get 40 days interest for example, then they would take the 90 days off of that balance.

That's how I would expect it to work.

VT82

Helene87 wrote: »

Hello,
Will Halifax just take 90 days interest off of my initial deposit, and then return that figure to me?

Nope, otherwise as well as penalising you 90 days' interest, they would also be penalising you your accrued interest, which would be outside of their T's and C's.

Helene87 wrote: »

Hello,
Or will Halifax take 90 days interest - the number of days that my account has been open for when I finally close it. For example: If I closed it today, would they take (90 days interest - 40 days interest) = 50 days interest. In this case, it would obviously make sense to try to keep my account open for as long as possible.

Yes this is correct, as per what the first person you spoke to informed you, and Archi of course.

Helene87

Ok, Does it make a difference that interest is credited to my account annually?

eskbanker

Helene87 wrote: »

Ok, Does it make a difference that interest is credited to my account annually?

No, they'll calculate the interest you've earned right up to the closure date regardless of whether it's actually been credited to the balance or not (and then deduct the 90 days worth from that figure).

Froggitt

How much is in the ISA and what is the interest rate?

Helene87

At present there is around £12,000 in there, and the interest rate is 1.61%

colsten

Assuming the £12,000 have all been deposited on the same day, you get roughly 53p interest per day. The 90-day penalty would therefore be £47.64. However, you will also be paid interest for every day you had the money in the account, so the total 'damage' will be less than that.

Helene87

Ok, thanks, this clears things up a bit for me.