5% accounts - which would you go for?

Albermarle

Black_Cat2 said:

Thanks refluxer.  Bit of a shame really.  Like Zopa and would've gone with them if not for that part 🐈

There was a debate about this on another thread. It would seem that some ( most?) providers register the interest each year for longer fixed term accounts with HMRC, even though you have no access to it.
Anyway it is not completely clear cut what happens, as far as I could see.

pecunianonolet

I am now confused as well. 

Was planning to put 15k into the 6 months Atom fix for 3.55% AER today with monthly interest payment. This should give me ca. 261.46 over the 6 month term in interest. Was thinking that I can count 4 months (Dec, Jan, Feb, March) of interest to this tax year and interest for April and May count towards next years allowance. 

Is this right or would the full amount count towards next years PSA? 

Black_Cat2

Thanks Albermarle.  If they registered it yearly I would've gone for it.  It's a shame they all don't do it as 'standard'.  You never know, maybe things will change 🐈

Sensory

What should happen in theory: tax is payable when interest can be accessed/withdrawn (with or without penalty).

What actually happens in practice: tax is payable when interest is reported to HMRC.

There's clearly no penalty for providers not following the rules.

Albermarle

pecunianonolet said:

I am now confused as well. 

Was planning to put 15k into the 6 months Atom fix for 3.55% AER today with monthly interest payment. This should give me ca. 261.46 over the 6 month term in interest. Was thinking that I can count 4 months (Dec, Jan, Feb, March) of interest to this tax year and interest for April and May count towards next years allowance. 

Is this right or would the full amount count towards next years PSA? 

To be sure you would need to call/mail the provider.
However some have very long wait times, or do not respond at all.
Then a good chance that whoever you speak to will not know the answer.

badger09

pecunianonolet said:

I am now confused as well. 

Was planning to put 15k into the 6 months Atom fix for 3.55% AER today with monthly interest payment. This should give me ca. 261.46 over the 6 month term in interest. Was thinking that I can count 4 months (Dec, Jan, Feb, March) of interest to this tax year and interest for April and May count towards next years allowance. 

Is this right or would the full amount count towards next years PSA? 

If you opt for monthly interest, then Atom should report interest credited prior to 5/4/23 to HMRC for 2022/23, and the remainder for 2023/24. 

Whereas annual interest would all be reported for 2023/24