ISA’s at Northern Rock

ISA’s at Northern Rock February 15

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Northern Rock currently offers three types of ISA’s: the fixed rate mini cash ISA; the instant access mini cash ISA; and the 30 day mini cash ISA. All Northern Rock ISA’s are cash ‘mini’ ISA’s, which means that up to £3,000 can be invested in it in each tax year. Up to two cash mini ISA’s can be held, as long as they are not owned in conjunction with a ‘maxi’ ISA - which are not available from Northern Rock.

However, Northern Rock does offer Tessa only ISA’s. Although Tessas (Tax-Exempt Special Savings Accounts) were replaced by ISA’s in 1999, the original capital can be ‘rolled over’ into a new investment - the Tessa only ISA’s, which are therefore only available to existing Tessa holders. Northern Rock offers three forms of Tessa only ISA’s: the instant access Tessa only ISA; the fixed rate Tessa only ISA; and the 30 day Tessa only ISA. These Tessa only ISA’s follow the same general format as their ‘normal’ ISA counterparts, except when stated. The main benefit of all forms of ISA’s is that they are exempt from tax.

Fixed rate mini cash ISA

The fixed rate ISA offers tax-free savings with a guaranteed interest rate. Interest is paid annually and can be added to the original investment, while it is possible to access the money in the account instantly. Fixed rate ISA’s can be opened either by post or through any Northern Rock branch. However, there are only a limited number available and the offer will be withdrawn once fully subscribed. Interest is paid at a gross 5.5 per cent per annum for deposits over £500.

Instant access mini cash ISA

As the name suggests, the instant access mini cash ISA allows money to be taken out at the holder’s discrepancy - the only caveat is a minimum of £10 is taken out at each withdrawal. The interest rate is guaranteed to be no lower than two per cent below the UK bank base rate. A minimum of £1 must stay invested at all times.

30 day mini cash ISA

In contrast to the previous two ISA’s, it is not possible to withdraw money from a 30 day ISA account without first giving 30 days’ prior notice. In return for this inconvenience, Northern Rock pays a higher interest rate: it will not fall lower than one per cent below the UK bank base rate (compared with two per cent for the instant access ISA). An “introductory bonus” will also be paid six months after the account is opened - although only one bonus is available per customer. There is no charge for withdrawals (which must be a minimum of at least £250).

Fixed rate Tessa only ISA

Interest for the one year fixed rate ISA is fixed until February 15th 2008, and interest for the four year fixed rate ISA is be fixed until February 15th 2011. After this period the account will become a 30 day ISA.

Instant access Tessa only ISA

The interest will never be lower than two per cent below the UK bank base rate. Existing Tessa only ISA account holders with another provider can transfer the funds into an instant access ISA without it counting towards the ISA investment limit - it would still be held separately as a Tessa only ISA.

30 day Tessa only ISA

See 30 day mini cash ISA.

Written Exclusively by AdFero for ISA Guides

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