M&S wants its new instant access ISA to be your favourite

The new instant access ISA from Marks & Spencer is angling to become the favourite of savers in the UK, thanks to its bonus-free interest rate of 3 per cent.

The new M&S offering not only permits savers to transfer in old ISA savings pots from rival banking providers, but requires only an affordable £100 minimum deposit to take out, leaving savers yet to deposit their entire annual ISA allowance of £5,340 an excellent last-minute option.

The offering also has quite a bit of flexibility, as M&S is allowing customers to split up the cash they deposit within the account to take advantage of a selection of its fixed rate bonds, thanks to an agreement with HMRC to operate the cash ISA as a ‘wrapper.’  While the 3 per cent tax free instant access ISA rate remains the main attraction (one that beats the 2.85 per cent offered by Virgin Money handily), one, two, and three-year fixes carry rates of 3.25, 3.50, and 3.75 per cent respectively.

Both the Virgin Money and the M&S offerings have been cited as rare; neither make use of bonus rates that expire after a period of 12 months, leaving the returns on the savings product quite low and prompting savers little choice but to switch providers in order to keep their money working for them in an effective manner.  The instant access nature of the savings product means that M&S permits savers to top up or dip into their balances as many times as they wish – though savers need to keep in mind that withdrawals made from the account cannot be funneled back into a similar product if this would exceed their yearly deposit limit.

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