Skipton's 5% ISA to be withdrawn
Launched on 2 March, the ISA spent two weeks at the top of the best buy tables.
Eager savers have until 5pm to snap up the deal. It is fixed at 5% for five years and is available with a minimum investment of £500.
The ISA also accepts transfers from previous years' ISAs and savers can opt to receive interest monthly (instead of yearly) for a slightly lower rate of 4.89%.
Skipton says they will replace the ISA with another deal later this week but no details have yet been confirmed.
Whichever interest option savers plump for, the deal is well ahead of the competition. The next best long-term fixed ISAs are 4.3% for five years from Northern Rock, or 4.3% for four years from Halifax and Royal Bank of Scotland.
With the base rate still languishing at 0.5%, any account that pays 5% is a tempting option, however the Skipton deal won't be suited to everyone. Savers need to be sure they can afford to tie their money up for the full five years.
Should you need to get your hands on the money before that time you would suffer a penalty of 240 days interest, have to withdraw the total balance and close the account.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.
Also referred to as the bank rate or the minimum lending rate, the Bank of England base rate is the lowest rate the Bank uses to discount bills of exchange. This affects consumers as it is used by mainstream lenders and banks as the basis for calculating interest rates on mortgages, loans and savings.