We are changing the way we pay interest on our Cash ISA and Open Access Cash ISA. Going forward, all Cash ISA customers will start to receive monthly interest payments instead of annual. If you are saving with a Moneybox Cash ISA, here’s what this means for you.
What is changing?
Your interest will continue to be earned daily on cleared balances. It will now be paid into your account on the first day of each month, rather than at the end of your 12-month anniversary period.
You will see this change reflected in your Cash ISA when you view your breakdown in-app or via the website.
Why is interest going to be paid out monthly?
Switching from annual to monthly interest payments means more of your money is FSCS protected, as when interest is paid out, it’s covered by the Financial Services Compensation Scheme (FSCS).
Additionally, moving to monthly interest aligns our Cash ISA with our Simple Saver, Reward Savings Account, and Notice Accounts, which also pay interest on a monthly basis.
When will this take effect?
Changes will be staggered across all Cash ISA and Open Access Cash ISA accounts and completed by the end of May. We’ll be in touch via email to let you know when your account is being updated.
Will the amount of interest I earn change?
The total interest earned over a year will remain unchanged. This is due to your interest rate being based on the Annual Equivalent Rate (AER), which shows how much interest you would earn across a one-year period, regardless of how frequently interest payments are made.
However, you will see a change in your account under Today’s interest. This is because you will earn interest based on the money you’ve contributed, interest paid, and interest due (interest that has been earned but not yet credited to your account). Every day you earn interest, your total value will grow, and each day you will earn more interest on the higher amount. The daily rate is calculated so that you keep earning the annual equivalent rate over a year – no matter how often the interest is added to your account (also known as daily compoundingThe return you earn on top of your investment gains by reinvesting your profits instead of withdrawing them.).
By the end of the year, you will have been paid the same amount as you would with an annual interest payment cycle. This is shown in the below graph:
Please note when checking this on the app you should head to Wealth > Cash ISA > tap your total value > Interest paid. When checking on the website, this will be under Breakdown.
When will I receive the interest that I’ve already accrued?
Any interest that you have accrued in your current 12-month period will be paid into your Cash ISA or Open Access Cash ISA as part of the update. This will be communicated to you once it’s complete.
If you are within your introductory bonus period, you will receive the total amount of interest that you have accrued to date, and this will include your bonus. You will continue to receive the remainder of your bonus in monthly payments until this expires.
Will I be able to withdraw?
During the time that your Cash ISA is updating from annual to monthly interest payments, which may take up to one day, you will temporarily be unable to withdraw or move money from your Cash ISA. This will be signposted within your account and will be available again once the update is complete.
You will also be notified via email the day before your account is updated.
What other terms and conditions apply?
The full terms and conditions are set out in the updated Moneybox Terms & Conditions.