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HTB annual vs monthly interest payment

edwardmluk
edwardmluk Posts: 196 Forumite
in ISAs & tax-free savings
In short, if I get a HTB in the short term and buy a house in under a year, do I need to go with a provider who pays interest monthly in order to actually receive that interest (e.g. not Halifax who pay on the account anniversary)?

Comments

  • Archi_Bald
    Archi_Bald Posts: 9,681 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Interest gets calculated daily. You will get any interest accrued by the closing date. The normal interest payment date is irrelevant.
  • Flobberchops
    Flobberchops Posts: 1,279 Forumite
    1,000 Posts Fifth Anniversary Combo Breaker
    The 25% bonus gets awarded on the closing date, sure, but what about compounding of regular interest? Surely a monthly interest payment is preferable all other things being equal.
    : )
  • HappyMJ
    HappyMJ Posts: 21,115 Forumite
    10,000 Posts Combo Breaker
    Flobberchops wrote: »
    The 25% bonus gets awarded on the closing date, sure, but what about compounding of regular interest? Surely a monthly interest payment is preferable all other things being equal.

    It's exactly the same.

    Annual interest of 3% is equal to monthly interest of 2.96% divided by 12 and compounded each month. If anything it's a penny difference per year on £2,000. It's not enough to worry about.
    :footie:
    :p Regular savers earn 6% interest (HSBC, First Direct, M&S) :p Loans cost 2.9% per year (Nationwide) = FREE money. :p
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