Fixed Rate ISA - Interest Paid At Maturity - What Happens If I Take The Money Out Early?

thundyuk

Sorry if there's a thread around here somewhere about this but can't seem to find it, or find an answer in the T&Cs.

I'm just curious -  I have an ISA that's fixed at a certain APR for 12 months & pays accrued interest at maturity not monthly. The T&Cs say I can take the money out at anytime (there' s a penalty but it's minor). 

What happens (ignoring the penalty) if I take the money out after six months, so it's basically at £0? Do I get the first six months' interest paid at the maturity date still on the amount I used to have in there for the first six months?

Thanks

Bigwheels1111

You pay the interest fine, interest and original amount should be returned to you.

thundyuk

Ah, so when you do this they pay you out early effectively? 

So, I'd pay (for example) two months' interest as a fine, get four months' interest that I've earned, plus the OG amount invested?

RobfromCornwall

thundyuk said:

Ah, so when you do this they pay you out early effectively? 

So, I'd pay (for example) two months' interest as a fine, get four months' interest that I've earned, plus the OG amount invested?

Yes.

You can use this calculator to work out what it would cost you.  

https://www.moneysavingexpert.com/savings/isa-switch-calc/

Albermarle

thundyuk said:

Ah, so when you do this they pay you out early effectively? 

So, I'd pay (for example) two months' interest as a fine, get four months' interest that I've earned, plus the OG amount invested?

The 'fine' gets bigger the longer the fixed rate/term is for. Even if you withdraw it near the end of the fixed term.
You need to read the T's & C's of the product every time.

thundyuk

Thanks everyone