Savings Accounts News 2012 Cash ISA Selection
20 March 2012 / by Oliver Roylance-Smith
With time running out to meet the 5th April deadline, we have brought you our selection of the best cash ISAs available.
Our ISA season instant access selection is from Cheshire Building Society who are offering up to 3.35% on the Cheshire Direct Cash ISA. This rate includes a fixed introductory bonus of 2.35% paid until 30th September 2013 and offers unlimited withdrawals but is only available for deposits over £1,000 and to new subscriptions and does not accept transfers.
Short term fixed rate (1-2 years)
Cheshire Building Society also features here with a headline rate of 4.00% fixed for 18 months with their Direct Fixed Rate ISA. There is £1,000 minimum balance and your interest is calculated daily and paid at maturity. However, the plan does not accept transfers and withdrawals are not permitted during the fixed term.
Medium term fixed rate (3-4 years)
The leading rate over 3 years is provided by Halifax who is offering 4.25% fixed for 3 years via their 3 Year Fixed Rate Cash ISA. With a small minimum balance of only £500 you are also able to transfer existing cash ISAs, but no withdrawals or deposits are permitted once the account is opened.
Medium term fixed rate alternative (3-4 years)
Investec Bank’s 3 Year Deposit Plan offers a fixed return of 18% provided the FTSE 100 finishes higher than its starting value (subject to averaging). If the FTSE finishes lower, then you only receive a return of your initial capital but if it does pay out, the fixed return equates to over 5.60% per year. This plan also allows you to apply for the next tax year as well as the current tax year at the same time and will accept transfers and non-ISA deposits.
Long term fixed rate (5 years+)
Halifax also features in our longer term fixed rate selection with their 5 Year Fixed Rate Cash ISA. This plan pays 4.50% fixed for 5 years and has a minimum balance of £500 although no withdrawals are permitted once the account is opened. Transfers are permitted.
Long term fixed rate alternative (5 years+)
Investec Bank’s Kick Out Deposit Plan offers a return of 6.25% times the number of years the plan has been in place. The plan has a five year term but will mature early or ‘kick out’ from year 2 onwards provided the FTSE finishes higher than its starting value. The plan has full capital protection provided by Investec Bank plc.
High yielding income plan
The Fair Investment Income Deposit Plan offers the potential for 7.25% per year provided the FTSE 100 remains between 4,500 and 7,250. This yield equates to the potential for an additional 2.75% per year when compared with our best long term fixed rate, however the plan does have a 6 year term and if the FTSE moves outside of this range during the year, no income will be paid. The plan has full capital protection provided by the Royal Bank of Scotland.
Important reminder – why do an ISA?
The main reason for making sure you use your annual ISA allowance each year relates to the tax advantages, since no tax is payable on the income you receive and there is no need to declare any ISA income or capital gains on your tax return. Cash ISAs therefore provide tax efficient income and growth, the value and benefit of which is compounded over time. Please note that tax treatment depends on your individual circumstances and may change.
No news, feature article or comment should be seen as a personal recommendation to invest. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment. If you are at all unsure of the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.
Some of these plans are structured deposit plans that are capital protected. There is a risk that the company backing the plan or any company associated with the plan may be unable to repay your initial investment and any returns stated. In this event you may be entitled to compensation from the Financial Services Compensation Scheme (FSCS), depending on your individual circumstances. In addition, you may not get back the full amount of your initial investment if the plan is not held for the full term. The past performance of the FTSE 100 Index is not a guide to its future performance. Tax treatment depends on your individual circumstances and may change.
© Fair Investment Company Limited