Virgin Money Regular Saver interest

Time4T_Accounts

Steve_PL_too said:

colsten said:

Steve_PL_too said:

Largely, but not necessarily for everyone, nullified by the FSCS, is that once the interest has been paid to you then you won’t be a creditor of any institution that fails. Might be of value to someone...?

What does nullified by the FSCS mean, please? Who or what says that FSCS protection depends on whether you have received interest?

Nullified in the sense that if you’ve already received your interest then you don’t have to rely on being covered by the scheme, whereas those who wait to receive their interest annually could have to forego their interest in the event of failure simply because they are creditors.  The interest is due, but not paid.  Not paid = not covered. Extremely unlikely, granted.

I correct myself... accrued interest is covered...

surreysaver

colsten said:

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.

And of course, with interest rates plummeting, I'm over the £1k threshold this year, will likely be straddling it next year, so I'm holding off renewing my Regular Savers for HSBC etc until after April 6th, as the year after next will likely be nowhere near £1k

glider3560

surreysaver said:

colsten said:

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.

And of course, with interest rates plummeting, I'm over the £1k threshold this year, will likely be straddling it next year, so I'm holding off renewing my Regular Savers for HSBC etc until after April 6th, as the year after next will likely be nowhere near £1k

Same for me.  My personal savings allowance allowance is only £500 (and 40% tax on anything over), but next year my interest will be lower due to decreased rates and getting a new £20k ISA allowance in April.  Shifting interest to the next tax year will be very beneficial to me this year.

someone

I opt for monthly on ISA Interest and annually if possible on normal interest so I can target future tax years given the falling rates.

General_Grant

AER = annual equivalent rate
Does that not mean that if the monthly interest were reinvested in the same account it would produce the same amount of interest for the year but if the interest is withdrawn then it isn't earning interest in that account (although you may put it somewhere else for the same or better rate)?

cricidmuslibale

General_Grant said:

AER = annual equivalent rate
Does that not mean that if the monthly interest were reinvested in the same account it would produce the same amount of interest for the year but if the interest is withdrawn then it isn't earning interest in that account (although you may put it somewhere else for the same or better rate)?

Essentially yes you're correct, if the monthly interest is never withdrawn throughout the lifespan of the account then over each 12 month period you get the same amount of interest in total (within a few pence or two) as you would get if you opted for annual interest instead. If the interest is withdrawn in any month then clearly no interest is being earned on that amount of interest in future months so the total amount of interest earned over the year in that account will be lower.

schiff

This riveting discussion has now gone on longer than that recent interview on US TV. At least there have been no accusations of racism.

Eco_Miser

It's keeping the thread on the front page, ready for tomorrow's flood of 'my interest has/has not been paid' post. Which was the purpose of bumping the thread on Monday. Meanwhile, people's views on the best way to receive interest are being challenged or reinforced .

schiff

Patience is a rare virtue among MSE folk.

polymaff

For those debating phasing/timing of interest payments it is an Interesting year, this year.

The last FOUR days of the tax year will be non-banking days.

HMRC told me that in such circumstances I could choose which year I declared the interest in.

Tell that to the marines...