ISA focus: the NatWest e-ISA

Last updated: Apr 17th, 2012
News by Rebecca Rutt
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NatWest has increased the rate on its instant-access cash ISA by 1% in an attempt to lure in new customers.

The 1% rise comes in the form of a 12-month bonus and has pushed the bank's ISA nearer to the top of the market. But the level of interest you'll earn is staged and depends on how much money you have in the account.

The ISA now pays 3% interest on balances of up to £9,999, 3.25% on between £10,000 and £29,999, and if you have more than £30,000 the account will pay out 3.5%.

As there is a bonus included, the rates will drop after 12 months and at this point you'll need to switch your money elsewhere to get a better deal.

There are no withdrawal penalties and the account can be opened and managed online. 

Moneywise verdict:

If you have more than £30,000 sitting in an old ISA that isn't earning much interest, you could transfer this into the NatWest e-ISA and start earning 3.5%. This is a competitive rate for an instant-access account.

But if you have less than £30,000, then a look at all the instant-access accounts on the market shows a handful beating this rate.

Although this account is hitting the headlines because of the increased rate, NatWest has just tacked on a bonus of 1% for a year and after this time you'll need to go through the process of switching your money if you want a decent rate of return.

See our regularly updated best cash ISA feature for all the top rates

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Your Comments

Am I missing something here or are all the reviewers missing the obvious question?....the bonus is only 1%, so what is to stop Natwest reducing the variable rate in a couple of months to say, 0.5% (base rate)? - yes, the bonus is guaranteed for 12 months but it is no bloody good if the variable rate is quickly reduced - then everyone will just get the new variable rate plus the 1% bonus. - that is not competitive at all!