Interest on Savings - is it projected?

I'm looking at a new account with a better interest rate.

Interest is paid on 31st March. If I put in £21,000 yesterday, I'd get £252 in March.

Obviously, £252 is less than £1000 (my PSA). However, if this was projected then I'd be over the 1000 limit (because a year's interest would equate to £1008).

Can I put £21,000 in now - earn good interest in March, and then move the money to an ISA in April before that interest builds up over the new tax year?

Comments

  • badger09
    badger09 Posts: 11,059
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    edited 2 January at 1:06PM
    I'm looking at a new account with a better interest rate.

    Interest is paid on 31st March. If I put in £21,000 yesterday, I'd get £252 in March.

    Obviously, £252 is less than £1000 (my PSA). However, if this was projected then I'd be over the 1000 limit (because a year's interest would equate to £1008).

    Can I put £21,000 in now - earn good interest in March, and then move the money to an ISA in April before that interest builds up over the new tax year?
    Yes. 
    Assuming the new account isn’t fixed rate/fixed term. If it is, then you’ll almost certainly be unable to withdraw any until the term expires. 

    But you can only pay £20k into an ISA each tax year 
  • doriangray23
    doriangray23 Posts: 7
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    badger09 said:
    I'm looking at a new account with a better interest rate.

    Interest is paid on 31st March. If I put in £21,000 yesterday, I'd get £252 in March.

    Obviously, £252 is less than £1000 (my PSA). However, if this was projected then I'd be over the 1000 limit (because a year's interest would equate to £1008).

    Can I put £21,000 in now - earn good interest in March, and then move the money to an ISA in April before that interest builds up over the new tax year?
    Yes. 
    Assuming the new account isn’t fixed rate/fixed term. If it is, then you’ll almost certainly be unable to withdraw any until the term expires. 

    You assume correctly - thank you for your help :)
  • AmityNeon
    AmityNeon Posts: 891
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    Interest is not projected; it's almost always calculated daily, and then paid at certain frequencies on specific dates. No institution is going to pay you a year's worth of interest after only holding your money for 3 months; if they miraculously did, you're much better off receiving £1,008 instead of just £252.
  • Cosmic_Life
    Cosmic_Life Posts: 18
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    If you have not maxed out this years ISA allowance, then do that
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