New Cash ISA From Clydesdale And Yorkshire Banks

Clydesdale and Yorkshire Banks have a new Cash ISA Fixed Rate Bond with a competitive interest rate.

The new Cash ISA is a fixed rate bond with a maturity date of 31 October 2013. It has a competitive interest rate of 4% Gross/AER.

The minimum opening deposit is £2,000. The maximum amount you can invest in a Cash ISA in this tax year is £5,340. This savings account though also allows transfers in subject to ISA regulation limits.

Part withdrawals are not permitted on the account and should you need to close it before the maturity date there will be an interest penalty based on the remaining term, with a minimum charge of £30.

Interest is calculated daily from the date of deposit and is applied annually and at maturity.

Steve Reid, Retail Director for Clydesdale Bank, said: “We know that people need their money to work hard for them and this very competitive fixed rate ISA gives our customers another great opportunity to maximise the return on their savings.

“With ten times more savers than borrowers, we are keen to demonstrate our support through our range of products which is why we’ve also just launched a highly competitive range of term deposits.”

MoneyHighstreet comments: “This is certainly a savings account to consider if you have not yet used your Cash ISA allowance this tax year. Don’t forget previous years ISAs too. What level of interest are you getting on them? It may be advantageous to consider transferring them.

What about interest rates you are getting on other savings accounts too? It may be worth swapping the money into an ISA – using your tax free allowance and getting a better interest rate.

Low interest rates have generally proved difficult for savers and the impact of rising inflation is making it even more difficult to get a good return on savings.

One slight positive for savers is that from next April the ISA limit will be linked to the CPI, the rate of inflation, currently 5.2%.

The new Cash ISA limit for the next tax year, the 2012-13 tax year is £5,640. The full allowance in both Cash and Stocks and Shares ISAs is £11,280.

Clearly taking advantage of your tax free ISA allowance is important. You of course need to consider your own circumstances and whilst for example you may be able to get a better rate of interest if you are prepared to tie your money up for a period of time, you are locking your money away for that period of time. Whilst you may be permitted to close the account early you will incur an interest penalty which will of course negate at least some of the value of getting a higher interest rate in the first place.”