interest paid monthly or yearly?

G_M

Why not get the best of both worlds....

Go for annual, which will typically have a slightly higher interest rate to allow for the fact that the monthly option compounds the interest (so the AERs are typically the same).

But then close the account after, say, 6 months. The interest earned will then be added after 6 months, not a year, and the whole lot (capital and interest) moved to another similar account, thus compounding the interest.......

polymaff

G_M wrote: »

Why not get the best of both worlds....

Go for annual, which will typically have a slightly higher interest rate to allow for the fact that the monthly option compounds the interest (so the AERs are typically the same).

But then close the account after, say, 6 months. The interest earned will then be added after 6 months, not a year, and the whole lot (capital and interest) moved to another similar account, thus compounding the interest.......

And the annual benefit achieved on £4,000 deposited in a 2% account?

Forty pence.

Before tax.

big4split

Should the worst happen and a bank goes bust the FSCS should kick in (up to 85k) and give you your capital back.

If monthly interest has been added the interest is included in the capital. Annual interest not yet paid, even though you may be many months into the interest year won't be included.