A new direct Isa (individual savings account) is due to be launched by government-backed savings provider National Savings and Investments (NS&I) this week.
The Isa will be available online and via the telephone from Thursday, April 6th 2006, and has a starting interest rate of 5.05 per cent a year.
NS&I guarantees that for the next two years, the savings interest rate will not drop below at least 0.55 per cent more than the Bank of England's base rate.
Up to £3,000 can be invested in the Isa during every tax year, while subsequent deposits and online withdrawals are allowed.
The savings account also comes with a capital guarantee of 100 per cent. A minimum deposit of £1,000 is required to open the savings account.
This savings account offers a "great opportunity" for tax-free savings, says the sales director of NS&I, John Prout.
What is more, savings account holders get 24-hour online access to their Isas and the additional flexibility to carry out transactions by phone, he points out.
"Money saved in our direct Isa will also earn a really competitive rate of interest and we guarantee this to beat the base rate by more than half a per cent for at least the next two years," Mr Prout continues.
"It is a straightforward, guaranteed offer and we would not confuse or short-change our customers with short-term introductory rates or any other hidden features."
Savings provider launches new Isa
Savings provider launches new Isa
Mon, 03 Apr 2006
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