Early Withdrawal Virgin Money 1yr Fixed ISA

CheddarCat

The Ts&Cs says that
“Any withdrawals made within the fixed rate period are subject to a charge equivalent to 60 days' loss of interest on the amount withdrawn.”

If I have the money in the account for 10months, does this mean:
a) I will earn interest only for 10months; 
b) I will earn interest only for 10months and have to pay penalty equivalent to the interest I earn for 60 days; or
c) I will not earn any interest and have to pay penalty equivalent to the interest I earn for 60 days (I will get my money back less than when I put in)?

Or I misunderstood completely and it’s something else!?

Any advice would be much appreciated. Thanks. 

Mark_d

One year IS twelve months.  So if you withdraw after 12 months, you are not withdrawing early, and you will get interest for the full 12 months.

Ayr_Rage

Mark_d said:

One year IS twelve months.  So if you withdraw after 12 months, you are not withdrawing early, and you will get interest for the full 12 months.

The OP is planning an early withdrawal as per the topic title, which is possible with ISAs.

@CheddarCat I believe (b) will apply.

PRAISETHESUN

My understanding is that interest is calculated daily but paid at the end of the term. For any withdrawals, a penalty of 60 days interest will apply only on the amount withdrawn (ie. if you make a partial withdrawal then only the amount withdrawn is subject to the penalty).

In your scenario, assuming you make a full withdrawal after 10 months of the 12 month term, you should end up with a net of approximately 8 months interest (10 months you actually had money in the amount, less the 60 day (approx. 2 month) penalty). Scenario B sounds like the closest to this.

trickydicky14

CheddarCat said:

The Ts&Cs says that
“Any withdrawals made within the fixed rate period are subject to a charge equivalent to 60 days' loss of interest on the amount withdrawn.”

If I have the money in the account for 10months, does this mean:
a) I will earn interest only for 10months; 
b) I will earn interest only for 10months and have to pay penalty equivalent to the interest I earn for 60 days; or
c) I will not earn any interest and have to pay penalty equivalent to the interest I earn for 60 days (I will get my money back less than when I put in)?

Or I misunderstood completely and it’s something else!?

Any advice would be much appreciated. Thanks. 60 days, the rest of the money will carry on as normal.

The sum of money you take out will earn interest for the time it was invested minus 60 days interest, the rest of your money will carry on as usual till maturity.