Halifax offers three market-leading ISAs
Halifax has three market-leading fixed-rate ISA accounts available for three, four and five-year periods paying 4.25%, 4.35% and 4.5% respectively.
The accounts pay impressive rates and are a good option for savers who haven't yet opened a cash ISA for the current tax year (2011/12).
Alongside the good interest rates offered, an extra benefit of opening one of these ISAs with Halifax is its premium-bond-style prize draw. Anyone with more than £5,000 in an existing savings account can enter the competition to win a share of the monthly prize.
The monthly cash prize pot is made up of three payouts of £100,000, 100 £1,000 prizes and 1,000 £100 prizes. But for the months of May and June the number of top prizes available increases so you have the chance of winning 10 £100,000 prizes.
To register for the competition you need to fill out a form on the website (halifax.co.uk/savings/savers-prize-draw) and have an existing savings account with Halifax or Bank of Scotland. To be eligible for the prize draw, you'll need to keep at least £5,000 in your account for the duration of the month the competition applies to.
As the accounts are on a fixed rate you won't be able to access your money during the term and early closure of the account will result in a penalty of 365 days' loss of interest.
These accounts offer competitive rates and with the extra incentive of a cash prize savers can earn interest on their money and potentially win a large payout. Although the prize draw is a gimmick, the market-leading rates on offer are appealing and as the accounts are ISAs any gains will be tax-free.
So are there any drawbacks? The main thing to look at is the type of account available. While you'll be able to earn a decent tax-free return on your savings these accounts aren't suitable for anyone who will need instant access to their cash.
If you are after instant access the AA's instant-access ISA paying 3.5% or the Cheshire Building Society's similar online account paying 3.35% would be more suitable.
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.