Atom bank withdrawal interest drop - when to do this?

jungleboy123

Hello,

I wanted to see whether if i withdrew from Atom if i would benefit from not losing much interest at the end of the month or will it take all the interest for the current month making my idea fruitless? 

It was silly of me but i maxed my ISA for last year's period and put any overflow savings into Atom but now i want to chip into my ISA every time i do its going to kill my interest for that month!

The workaround is if i wait till the last day of the month to withdraw therefore negating all the penalties of interest?

Does this work?!

Thanks.

Barkin

It's not clear, but I'm guessing you're referring to the Reward Saver account?

If so, then no - your cunning plan won't work. Any withdrawal means you get the reduced interest rate for the whole of that month.

Shedman

Is this just a 'normal' Atom Instant Saver or the Instant Saver Reward account?  

If the normal Instant Saver then you would get all the interest earned on your current balance up to the point in the month you withdraw some money then you would earn interest for the rest of the month on the reduced balance i.e. they wouldn't take all your interest in any month you made a withdrawal.  However, clearly if you withdraw any monies at the end of the month you would earn more interest.  

But, of course, it could be that your ISA actually pays better interest than your Atom account (which is quite possible given Atom's interest on this normal Instant Saver isn't great) so you might be better to withdraw and transfer to the ISA at the start of each month or even just pay the whole lot into the ISA in one go as its not clear why you want to drip feed it into the ISA.

However, if you have the Instant Saver Reward account this pays a higher rate of interest (currently 4.75%) in any month when you don't make a withdrawal (and for this account an interest period month is treated as one month from the day of the month you opened the account (eg you opened account on 23rd Jan then your interest period month is 23rd to 22nd for every month thereafter).  However, if you withdrew any money at any point in that interest period month then you would get a reduced interest rate (3.00%) for that month.  But it would still be calculated on the actual balances for each day of that month and you still wouldn't lose all the interest in any month that you made a withdrawal.   And if you then make no withdrawals the following month the rate reverts back to the higher rate for each subsequent month until you make another withdrawal.

threads76

Presumably one option, if the aim was to avoid the reduced rate, would be to withdraw the entire balance on the first day of a new interest period?

jungleboy123

threads76 said:

Presumably one option, if the aim was to avoid the reduced rate, would be to withdraw the entire balance on the first day of a new interest period?

maybe you're right on that i have to do the opposite to my cunning plan!

jungleboy123

Shedman said:

Is this just a 'normal' Atom Instant Saver or the Instant Saver Reward account?  

If the normal Instant Saver then you would get all the interest earned on your current balance up to the point in the month you withdraw some money then you would earn interest for the rest of the month on the reduced balance i.e. they wouldn't take all your interest in any month you made a withdrawal.  However, clearly if you withdraw any monies at the end of the month you would earn more interest.  

But, of course, it could be that your ISA actually pays better interest than your Atom account (which is quite possible given Atom's interest on this normal Instant Saver isn't great) so you might be better to withdraw and transfer to the ISA at the start of each month or even just pay the whole lot into the ISA in one go as its not clear why you want to drip feed it into the ISA.

However, if you have the Instant Saver Reward account this pays a higher rate of interest (currently 4.75%) in any month when you don't make a withdrawal (and for this account an interest period month is treated as one month from the day of the month you opened the account (eg you opened account on 23rd Jan then your interest period month is 23rd to 22nd for every month thereafter).  However, if you withdrew any money at any point in that interest period month then you would get a reduced interest rate (3.00%) for that month.  But it would still be calculated on the actual balances for each day of that month and you still wouldn't lose all the interest in any month that you made a withdrawal.   And if you then make no withdrawals the following month the rate reverts back to the higher rate for each subsequent month until you make another withdrawal.

ah okay. so it looks like i need to find out when the interest is paid, then maybe do as another suggested here and withdraw the day after that to minimize the penalty.

I think i'd be better off finding a new savings account so i can move everything to that for the month then when the penalty period is over i move everything back.

boingy

The thing is, you have to withdraw the whole lot, because anything you leave in there will earn a paltry amount for the whole month. I toyed with opening one but realised it did not fit my "system".

jungleboy123

boingy said:

The thing is, you have to withdraw the whole lot, because anything you leave in there will earn a paltry amount for the whole month. I toyed with opening one but realised it did not fit my "system".

yeah annoying because its one of the high paying saving accts and pretty simple to manage.

threads76

boingy said:

The thing is, you have to withdraw the whole lot, because anything you leave in there will earn a paltry amount for the whole month. I toyed with opening one but realised it did not fit my "system".

One option maybe (if you don't mind the hassle of multiple accounts) if you wanted to pay back in at the higher rate within a month, would be to just open up another Instant Saver Reward account - that way the new account would start at the higher rate, rather than putting money back into the original account at the lower rate.

PeskyBlunder

threads76 said:

One option maybe (if you don't mind the hassle of multiple accounts) if you wanted to pay back in at the higher rate within a month, would be to just open up another Instant Saver Reward account - that way the new account would start at the higher rate, rather than putting money back into the original account at the lower rate.

It's limited to one per customer. Or do you mean closing the existing one? That probably wouldn't end well if one did it repeatedly.