Calculation Amount
Your Cash ISA interest is calculated daily in the background, based on your cleared balance. However, the interest amount is credited to your Cash ISA once a month, specifically on the final business day of the next month.
For example, the interest you earn for November would be paid into your account on December 31st.
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 your Plum Cash ISA:
Illustrative example (not based on your individual circumstances):
Consider a Cash ISA account with a 4.68% AER (variable) including the Bonus Rate of 0.88% AER and an initial balance of £10,000.
After a year, the balance would be £10,478.17. Interest accrued after 12 months is £389.81 and the bonus accrued after 12 months is £88.36, making the total interest accrued £478.17.
This assumes you make the full deposit when opening the account and do not make any further deposits or withdrawals in the following 12 months.
Compounding Frequency
Our Cash ISA compounds interest monthly, based on the cleared balance. This means interest is calculated and added to your balance once a month rather than every day.
Calculation Period
The calculation period for the basic Cash ISA interest 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 accrued will be credited to your Cash ISA account on the final business day of the next month.
The bonus interest amount will be calculated daily and paid annually to your account. Bonus interest earned will be paid to your account along with the interest earned for your 12th month (on the last business day of the next month), and at that point, will be available for withdrawal.