ISA Watch: Chorley Building Society's 60 Day Notice Cash ISA
With the ISA season in full swing, you'd think we would have seen a barrage of competitive rates coming on to the market.
Sadly, the rates are nowhere near the dizzy pre-credit crunch heights, so it's all the more important you search for the account that best suits your needs.
Chorley Building Society is offering 2.5% interest on its variable-rate cash ISA. While the top rate currently available on the market is from Coventry Building Society at 2.8%, the account comes with a 0.6% bonus for 12 months, so the rate will fall after a year is up.
The Chorley BS ISA has no bonus rate, meaning there's no need to worry about the figure dropping to a dismal level in 12 months' time.
The cash ISA has a minimum balance of £1 and interest is paid yearly. It is only available in-branch or by post, so lacks the convenience of online or phone banking. Chorley Building Society does not allow transfers-in from older ISAs you might have.
If you need to be able to get your hands on your money quickly, the building society also offers an instant-access account, but the rate is lower at only 2.2%.
For further information go to chorleybs.co.uk or call 01257 235000.
A savings account on which the account holder is required to give a period of notice before making a withdrawal or face a penalty, usually a loss of a specific number of days’ interest or pay a fee. Notice periods of 30, 60 or 90 days are common. These accounts usually pay higher than average interest rates and require large initial deposits (£1,000 minimum) so the notice period and penalties are there to discourage withdrawals. Some of these accounts will only allow a certain number of withdrawals a year.
There are limits to how much you can invest in any tax year. For 2011/12, the limit is £10,680. Of that, the maximum you can invest in cash is £5,340 and the balance of £5,340 can be invested in shares (individual company shares or investment funds). If you don’t take the cash ISA allowance, you can invest up to £10,680 into a stocks and shares ISA.
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.