Closing accounts

mx_85

What happens to interest when you close account in the middle of the year?

muddyfox470

It all depends on the account and the accounts t+c's.

Some / Most will accrue the interest up until the date that you withdraw (i.e. you tell them you want to close your account and they will give you all the money you have in the account and all the interest earned up to that date). Others may penalise you for early withdrawal (or giving no notice) and some may not give you any interest at all if it was a fixed term savings bond.

As is always the best thing, go speak to someone at your branch / on the phone and ask them what is the case in your account! they might ask you what you intend to do, and they might have a more suitable account for you (if you were moving it elsewhere)

Finally for ISAs, if you withdraw part of your allowance you cannot invest back into the account, if you have already maxed out your yearly subscription (see Martin's explanations in his articles). If you're closing an ISA but still want it tax-free TRANSFER it to your new provider!!