## Calculation Amount

The interest for your Cash ISA is calculated on a daily basis in the background, based on the money you have at the end of each day. However, the interest amount is credited to your Cash ISA once a month, specifically on the first business day of each month.

This monthly addition occurs because, in most cases, the daily amounts are too small to be individually added to your pocket. This is the formula we use every day in our system to calculate the interest for Cash ISA in Plum:

**Example**: Consider a Cash ISA account with a 4.04% VAR rate and an initial balance of £10,000. After a year, the balance would be £10,411.00 assuming that no withdrawals, additional deposits, or changes to the variable interest rate have happened during this period.

## Compounding Frequency

Our Cash ISA compounds interest monthly. This means interest is calculated and added to your balance once a month rather than every day. Moreover, please note that interest is compounded on the first working day of each month.

**Example:** In June, the first working day was June 3rd, so the balance for June 1st and June 2nd remained unchanged. This working day rule affects how the interest accumulates over the month.

## Calculation Period

The calculation period for the Cash ISA is from the first day of each month until the last day of the same month.

However, keep in mind that the interest that has occurred, will be credited to your Cash ISA account on the first business day of the following month.

**Please note that if you withdraw your money before the interest is credited to your account, the interest will be lost. **We recommend making withdrawals only after the interest rate has been credited to your Cash ISA.