NS&I to cut rates on its easy-access accounts
National Savings & Investments has announced it will cut rates of three of its easy-access accounts from September.
Its Direct ISA will fall from a tax-free 2.25% to 1.75%. Direct Saver rate goes down to 1.1% before tax (0.88% after tax) while the Income Bonds rates falls to 1.25% (1%)
On fixed rate deals, Coventry Building Society has launched a top paying two-year fixed rate bond where savers support research into cancer.
The Race for Life bond pays 2.1% before tax (1.68% after tax) on a minimum £1 fixed until April 30th 2015. The society will donate an extra 0.1% before tax of all balances in the account to the world's leading cancer charity Cancer Research UK. There is a monthly income option at 2.08% (1.66%)
Other top two-year fixed rate deals include ICICI bank pays 2.3% (1.84%) and Nationwide at 2.1% (1.68%).
Top one-year deals come from ICICI Bank at 1.95% (1.56%), the Post Office, where the deposit taker is the Bank of Ireland, at 1.9% (1.52%) while Metro Bank pays 1.85% (1.48%).
If you are happy to tie your money up for three years with ICICI Bank pays 2.55% (2.04%). Saga, where the deposit taker is Halifax, pays the same rate but you need a minimum £50,000 in the account.
Top easy-access accounts include Coventry Online Saver Issue 5 at 1.60% (1.28%) and Derbyshire NetSaver 11 at 1.7% (1.36%), including a 1.2 (0.96) percentage point bonus payable until 30th June 2014.
On tax-free cash ISAs you can earn 2.3% with Cheshire Building Society's ISA Saver Issue 3 easy access account. The rate is boosted by a 1.8 percentage point bonus payable until 31st October next year.
On fixed-rate cash ISAs top deals include Tesco Bank at 2.05% for one year and, Nationwide and Halifax at 2.1% for two years. Coventry pays 2.55% fixed until 31st May 2016 but you need to put the whole of this year's cash ISA allowance of £5,760 into the account and you can't transfer your existing cash ISAs into the account. The best three year deal for transfers comes from Virgin Money at 2.4%.
This article was written for our sister website Money Observer
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.