ISAs & PEPs news
Indulge in a bit of ISA fever
22 March, 2007
The looming end to the tax year has prompted banks and building societies to step up their efforts with regard to ISAs in order to capture a bigger slice of the market
In recent months, providers have become what Rachel Thrussell, head of savings at moneyfacts.co.uk terms as ‘creative’ with their ISA offerings:
“The packaged ISA is a new concept, offering what appears to be by far the most attractive interest rates, but requiring an additional account to be opened. The rates on some of these packaged ISAs are also inflated by limited rate incentives. If you are happy to open the required current account or take more risk with an equity based investment, then these current rates are unrivalled in the short term.”
Abbey offers a ‘Super ISA’ at an 8.10 per cent rate when opening a Guaranteed Growth Plan as part of the package, and Alliance & Leicester’s Premier ISA at the same rate runs in tandem with their Premier Current Account.
Thrussell continues: “Many of today’s best ISA rates include a bonus, so it is important not only to check out the size of the bonus, but also its length. Take a Barclays ISA for example; although this ISA includes a bonus of 1 per cent, at least it is available for a full 12 months, making the AER currently an unrivalled 6.5 per cent.
“As many ISAs are freely portable, your relationship with one provider does not have to be lifelong. So why not take advantage of the best rate for this year, and then decide on a new provider next April?”
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