The first major marker has been set in the push for savers’ cash with a new 3.16 per cent interest rate instant access ISA on offer from Cheshire Building Society, tax-free savings experts recently reported.
The new deal from the personal and business bank account provider handily beats the next-best offer from Nationwide, its parent mutual, which offers its own deal at 3.10 per cent. However, the Nationwide deal permits savers to transfer savings pots in from previous years, while the Cheshire offering does not, making it a poor choice for those with sizable nest eggs but an attractive one for individuals looking to begin saving with a tax-free account.
Like many savings products on offer in the UK currently, the Direct Cash ISA from Cheshire BS does carry a hefty bonus rate which expires in September of next year. 2.16 percentage points will evaporate on that date, leaving savers with a relatively low 1 per cent rate of return unless they transfer their cash to a more competitive option.
The building society is requesting a minimum £1,000 deposit in order to open up the account, and those taking out the savings product prior to the 5 April tax deadline will be eligible for topping up their new ISA with up to £5,640 from the following day, which is the 2012-2013 financial year ISA allowance. An additional feature of the Cheshire offering is the inclusion of unlimited withdrawals free from penalty, but savers do need to realise that once you’ve reached your deposit limit for the year, you will be unable to place any withdrawn cash back into the account.
Another caveat for savers includes the shared banking licence between Cheshire and its parent mutual, Nationwide. Any savers with deposits in both banking institutions are only covered to a collective total of £85,000 by the FSCS, though the event of a bank failure remains highly unlikely.