Virgin one year fixed- when is the interest paid?

borderline

I opened a one year fixed rate. It says maturity 23 Dec 2023

but under interest will be paid annually it says 5th August (it doesn't say year)

I'm confused, I thought the would pay interest at maturity, not 8 months later????

refluxer

The terms state that "Annual interest is paid on 5 August, and will be available the next working day. Monthly interest is paid on the last day of the month, and will be available the next working day" so if you've opted for annual interest, presumably it'll be paid every year on 5th August for the duration of the term, with a final payment upon maturity - ie. for you, that would be 5th Aug 2023 (for interest earned up until that date) and 23rd Dec 2023 (for interest earned between 6th Aug and 23rd Dec 2023).

borderline

refluxer said:

The terms state that "Annual interest is paid on 5 August, and will be available the next working day. Monthly interest is paid on the last day of the month, and will be available the next working day" so if you've opted for annual interest, presumably it'll be paid every year on 5th August for the duration of the term, with a final payment upon maturity - ie. for you, that would be 5th August 2023 and 23rd Dec 2023.

do you mean they will pay one half in august 5th 2023 and the rest in Dec 2023?

refluxer

borderline said:

refluxer said:

The terms state that "Annual interest is paid on 5 August, and will be available the next working day. Monthly interest is paid on the last day of the month, and will be available the next working day" so if you've opted for annual interest, presumably it'll be paid every year on 5th August for the duration of the term, with a final payment upon maturity - ie. for you, that would be 5th August 2023 and 23rd Dec 2023.

do you mean they will pay one half in august 5th 2023 and the rest in Dec 2023?

No. The interest will be paid in two installments, but it won't be 50/50 because 5th August is more than halfway through the 1 year term.

Madmart100

This confused me also (easily done). I opened my ISA just before the start of the financial year and expected April to be the annual interest date instead of August. Virgin tell me that there will be additional interest at maturity in March/April although I couldn’t find that information online 🤷

MissHap

So they are hanging on to your interest instead of paying you on maturity??
Bit naughty that but there get out will be its in your terms of agreement!
Probably why the multi billionaire owner is a multi billionaire!!!!!

eskbanker

MissHap said:

So they are hanging on to your interest instead of paying you on maturity??
Bit naughty that but there get out will be its in your terms of agreement!
Probably why the multi billionaire owner is a multi billionaire!!!!!

No, that's not what they're saying!

refluxer

Madmart100 said:

This confused me also (easily done). I opened my ISA just before the start of the financial year and expected April to be the annual interest date instead of August. Virgin tell me that there will be additional interest at maturity in March/April although I couldn’t find that information online 🤷

This is a good example of why you need to read the account T&Cs carefully whenever you open an account and it's also a good idea to save them for future reference, if they don't email them to you or have them available in online banking.  

If your T&Cs are the same as the ones I quoted above, it states that if you choose annual interest then you'll get the annual interest payment on 5th August and it therefore follows that you'll get a final one at maturity.

refluxer

MissHap said:

So they are hanging on to your interest instead of paying you on maturity??
Bit naughty that but there get out will be its in your terms of agreement!
Probably why the multi billionaire owner is a multi billionaire!!!!!

No, that's not right. For some strange reason, Virgin have chosen to make annual interest payments on one (seemingly-random) day of the year (5th August) so that's the date you'll receive the first interest payment (and subsequent annual payments if you've selected a term greater than 1 year). The final payment will be upon maturity. Virgin aren't holding back any interest payments beyond your maturity date.

Ocelot

Secure Trust and Kent Reliance also often pay out on set dates, irrespective of the term of the fixed rate. 

As others have said, you get a chunk notionally added to the sum on this date, and the balance at the end of the term (for one year fixes), and on the same date the following year (for longer fixes).