One financial services provider has recently announced the launch of a five-year ISA with a 5 per cent interest rate, sending it to the top of many best buy tables in the UK.
BM Savings new ISA is different from some other ISA savings plans available to the public. Instead of accepting last gap 2010-2011 ISA allowance deposits ahead of next Tuesday’s deadline, it was designed to be a high-interest alternative for savers looking to grow their existing funds.
The personal and business bank account provider is also allowing savers to top-up the new ISA with next year’s £5,340 if their transfer application includes a cheque for the appropriate amount. Savers can also start a completely new account up to the 2011-2012 year limit, with a minimum deposit of only £500.
BM Savings sets a new benchmark for 2011 with their 5 per cent rate, as it tops both Skipton Building Society and Northern Rock’s five-year ISA offerings by 0.5 percentage points. This can mean the difference of £100 more in interest each year for every £20,000 in an ISA pot.
Industry experts predict that the advent of BM Savings’ new offering will lead to another round of frenzied competition between banks hoping to attract savers with the coming year’s allowance being made available on the 6th of April.
Spain-based Santander recently announced it will be accepting new tax year applications on its base rate tracking Flexible ISA 3 deal starting on the 1st of April. Santander’s savings product carries a 3.3 per cent rate.
Industry insiders have advised consumers to take their time in choosing a new place to put their money for the coming, year, however. One Moneyfacts.co.uk savings expert, Michelle Slade, commented that many banks will typically wait until after the 6th of April before coming out with new, competitive deals for savers.