Virgin Money Regular Saver interest

Fingerbobs

what7 said:

Annual interest are much easier to track. 

Like me, I know my forecast interest for 2021/22 are already over the £1000 allowance, so I am waiting for the new tax year to open 1% RS, so the annual interest will go in 2022/23 tax year. 

I guess if you have handful of account, you might have the time and energy to track monthly, but if you have 2 dozen regular saver then it's another story.

I don't get this "tracking" thing. Surely you can still forecast your interest for the year in exactly the same way, regardless of interest payment frequency. In fact, you've reminded me of another advantage to monthly interest - it splits the interest across two tax years. I can see I'm flogging a dead horse here so I'll give up, and continue to opt for the marginally beneficial monthly interest option whenever it's available.

what7

Fingerbobs said:

what7 said:

Annual interest are much easier to track. 

Like me, I know my forecast interest for 2021/22 are already over the £1000 allowance, so I am waiting for the new tax year to open 1% RS, so the annual interest will go in 2022/23 tax year. 

I guess if you have handful of account, you might have the time and energy to track monthly, but if you have 2 dozen regular saver then it's another story.

I don't get this "tracking" thing. Surely you can still forecast your interest for the year in exactly the same way, regardless of interest payment frequency. In fact, you've reminded me of another advantage to monthly interest - it splits the interest across two tax years. I can see I'm flogging a dead horse here so I'll give up, and continue to opt for the marginally beneficial monthly interest option whenever it's available.

Yes, I could forget about it, and wait for tax year end.

Maybe that's exactly what I didn't want, split across two tax years.

I guess the only time I would want monthly interest is if I'm on £970, and want that £30 in the same tax year, rather than £360 in the tax year after.

Also I would prefer monthly interest if I don't intend to keep the account for the duration/whole year and worry whether their system will pay out interest when I close/switch (ISA)

And the monthly interest is handy to know if you are eligible for the interest (not breaking t+c) - bit like the Coventry BS RS issue.

I certain not bashing monthly interest, it has its merit, just 1% of the time

cricidmuslibale

Fingerbobs said:

what7 said:

Annual interest are much easier to track. 

Like me, I know my forecast interest for 2021/22 are already over the £1000 allowance, so I am waiting for the new tax year to open 1% RS, so the annual interest will go in 2022/23 tax year. 

I guess if you have handful of account, you might have the time and energy to track monthly, but if you have 2 dozen regular saver then it's another story.

I don't get this "tracking" thing. Surely you can still forecast your interest for the year in exactly the same way, regardless of interest payment frequency. In fact, you've reminded me of another advantage to monthly interest - it splits the interest across two tax years. I can see I'm flogging a dead horse here so I'll give up, and continue to opt for the marginally beneficial monthly interest option whenever it's available.

Far better to flog a dead horse than to heartlessly sit on top of one and take selfies, especially if your job normally depends on keeping your horse(s) alive and in the best possible condition!

colsten

what7 said:

Fingerbobs said:

what7 said:

Annual interest are much easier to track. 

Like me, I know my forecast interest for 2021/22 are already over the £1000 allowance, so I am waiting for the new tax year to open 1% RS, so the annual interest will go in 2022/23 tax year. 

I guess if you have handful of account, you might have the time and energy to track monthly, but if you have 2 dozen regular saver then it's another story.

I don't get this "tracking" thing. Surely you can still forecast your interest for the year in exactly the same way, regardless of interest payment frequency. In fact, you've reminded me of another advantage to monthly interest - it splits the interest across two tax years. I can see I'm flogging a dead horse here so I'll give up, and continue to opt for the marginally beneficial monthly interest option whenever it's available. 

Also I would prefer monthly interest if I don't intend to keep the account for the duration/whole year and worry whether their system will pay out interest when I close/switch (ISA)

And the monthly interest is handy to know if you are eligible for the interest (not breaking t+c) - bit like the Coventry BS RS issue.

Not planning to run an account for its duration / for a full year is hardly a reason for opting for monthly interest. Accounts which can be closed before maturity, and accounts which have no access restrictions will still pay interest for every day you had money in the account when you close them. It all comes back to what I said before - unless you need the money monthly for budgeting or tax purposes, there is no point in monthly interest.

As rovthe Coventry BS RS “issue”: well, that exists only in some minds. Enough said. 

colsten

Fingerbobs said:

what7 said:

Annual interest are much easier to track. 

Like me, I know my forecast interest for 2021/22 are already over the £1000 allowance, so I am waiting for the new tax year to open 1% RS, so the annual interest will go in 2022/23 tax year. 

I guess if you have handful of account, you might have the time and energy to track monthly, but if you have 2 dozen regular saver then it's another story.

I don't get this "tracking" thing. Surely you can still forecast your interest for the year in exactly the same way, regardless of interest payment frequency. In fact, you've reminded me of another advantage to monthly interest - it splits the interest across two tax years. I can see I'm flogging a dead horse here so I'll give up, and continue to opt for the marginally beneficial monthly interest option whenever it's available.

It’s not about forecasting interest but about interest actually received.

I did mention earlier that one of the reasons some might want to opt for monthly interest could be taxation. This doesn’t apply to me as however I would slice it, I couldn’t benefit from shifting any interest into an earlier tax year. YMMV.

schiff

I don't see the point of trying to manipulate interest into different tax years by electing for monthly interest. If you receive £1000+ in a tax year the excess is taxed at 20% wherever it falls.

colsten

schiff said:

I don't see the point of trying to manipulate interest into different tax years by electing for monthly interest. If you receive £1000+ in a tax year the excess is taxed at 20% wherever it falls.

Well, there could be situations where your total interest across two consecutive tax years could be, say £1,200, and where you could split it into £900 in one tax year and £300 in the next. So you could save paying 20% tax on £200, i.e. £24. Pointless exercise, though, as you say, if you get more than £1,000 every year. And even more pointless if your accounts don't actually offer monthly interest, lol.

Also if you are hovering between basic and higher rate tax band, you might want to perform some slightly unnatural acts to stop your interest going over £500, or at least contain the amount you have to tax at 40%. Again, it would be a pointless exercise if you are likely to be HR in consecutive years, and if your interest will remain above £500.

Fingerbobs

OK, I concede that, for people who are operating very close to their PSA limit, there may be an advantage in opting for annual interest, in that it pushes the interest payment into the following tax year, but that can only help short-term if you're in danger of going over in the current tax year, but not the following one. 

Aside from that, all of the reasons people give for choosing annual interest seem to be to do with simplifying the updating of their spreadsheets, rather than an actual advantage. They're effectively forfeiting an advantage of the account in order to simplify their "tracking" spreadsheet. 

For the vast majority of people, there is no reason not to select monthly interest. 

colsten

Fingerbobs said:

OK, I concede that, for people who are operating very close to their PSA limit, there may be an advantage in opting for annual interest, in that it pushes the interest payment into the following tax year, but that can only help short-term if you're in danger of going over in the current tax year, but not the following one. 

Aside from that, all of the reasons people give for choosing annual interest seem to be to do with simplifying the updating of their spreadsheets, rather than an actual advantage. They're effectively forfeiting an advantage of the account in order to simplify their "tracking" spreadsheet. 

For the vast majority of people, there is no reason not to select monthly interest. 

Help me with this - what is the advantage I am forfeiting by not going for monthly payment (where offered)? Bearing in mind that

1. I do not have a need for the cash before the annual payment date
2. I manually record, and need to manually record for tax purposes, all my income, including savings interest, with the date it occurs

Fingerbobs

colsten said:

Fingerbobs said:

OK, I concede that, for people who are operating very close to their PSA limit, there may be an advantage in opting for annual interest, in that it pushes the interest payment into the following tax year, but that can only help short-term if you're in danger of going over in the current tax year, but not the following one. 

Aside from that, all of the reasons people give for choosing annual interest seem to be to do with simplifying the updating of their spreadsheets, rather than an actual advantage. They're effectively forfeiting an advantage of the account in order to simplify their "tracking" spreadsheet. 

For the vast majority of people, there is no reason not to select monthly interest. 

Help me with this - what is the advantage I am forfeiting by not going for monthly payment (where offered)? Bearing in mind that

1. I do not have a need for the cash before the annual payment date
2. I manually record, and need to manually record for tax purposes, all my income, including savings interest, with the date it occurs

You're forfeiting the advantage of being paid your interest sooner. That is an advantage - the fact that you don't care about it is irrelevant - you are still passing up that advantage by not selecting monthly interest.