Scarborough Building Society hopes that its new individual savings account (Isa) will encourage people to start saving money while making the most of their tax-free savings allowance.
The savings provider's Guaranteed Isa Plus has a fixed savings rate that pays 5.05 per cent from the start of the investment until March 31st 2007.
This savings interest rate will then revert to an interest rate of 4.75 per cent until March 31st 2009, when the savings account matures.
Upon maturity, the savings interest rate will be set at the savings provider's variable mini cash Isa interest rate.
Available for a limited time only, the mini cash Isa requires an investment of between £1,000 and £3,000 in the tax year.
Half of the investment can be accessed by savings account holders from April 1st 2007, without having to give notice or incurring a penalty.
The new Scarborough Isa allows savers to potentially invest both this year and next year's Isa allowances, meaning that they could save up to £6,000 in total in the savings account, explains the head of retail strategy at the savings provider, Tony Burdin.
"However, with an initial premium rate of 5.05 per cent, we expect the account to be popular, so I would urge investors to act now to avoid disappointment," he adds.
Scarborough launches tax-free savings account
Scarborough launches tax-free savings account
Wed, 15 Mar 2006
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