One personal and business bank account provider has offered what many have thought impossible – a 3.5 per cent instant access ISA that permits transfers in – but what would otherwise be a best buy for many savers is limited by a catch, experts say.
Taxpayer-owned NatWest’s new offering, with an interest rate that ties with Cheshire Building Society and AA Savings for the top at 3.5 per cent, is only being made available to savers who are willing to transfer in at least £30,000 of ISA savings from years past. Not only that, but savers who take up the new offering will only earn 2.5 per cent until 16 April, when the 1 percentage point bonus rate is added to the offering.
Other than the 3.5 per cent rate offered to those transferring in at least £30,000, the NatWest offer is rather humdrum. Savers are permitted to deposit smaller amounts, but are not rewarded with the top rate, only offering 3.25 per cent on transfers of £10,000 to as much as £29,000 – but this falls below competitors’ deals that offer more for smaller deposit amounts, such as Santander’s 3.3 per cent return on a £2,500 opening balance.
Savers interested in the NatWest product investing under £10,000 will only receive 3 per cent on their cash. While interest is paid monthly and offers unlimited, fee-free withdrawals, a NatWest customer already possessing an e-ISA from the provider are barred from taking out the new savings product. Savers with massive ISA savings pots may be attracted to the new offering, but many experts have found NatWest’s postponement of its 1 percentage point bonus rate until 16 April particularly abhorrent.