ISAs Offer as Little as 50p Interest on Each £1,000 Over a Year, Don't Let Yourself Get Ripped Off

Many people have their money in Isas believing they are getting a reasonable amount of interest, yet you could be receiving as little as 0.05% on your savings as most Isas interest rates drop drastically after bonuses etc. on the account expire
 
Jan. 16, 2012 - PRLog -- Many people have their money in Isas believing they are getting a reasonable amount of interest, yet you could be receiving as little as 0.05% on your savings as most Isas interest rates drop drastically after bonuses etc. on the account expire

If you are asking, "What is an Isa?” you are not alone, many people receive advice telling them to put their savings in Isas, without understanding what they are and how much interest you could actually make from them.

Isas are used to boost returns for a fixed period, typically 12 months. The highest rates are on offer in April and May around the end of one tax year and the start of the next, when savers are looking to use their cash Isa allowance.

The maximum allowance for an Isa is £10,680, of which only £5,340 can be cash, the rest can be in shares, or you can take up the whole allowance in shares, alternatively you can mix and match by putting in smaller amounts of cash and using the rest of the allowance for shares.

“Many people make their choice of Isa by simply looking at the introductory rates and bonuses etc. This isn't a bad idea as long as you remember to move your money to another account when these introductory offers run out as you could be stuck with an Isa paying next to no interest on your savings, some Isas also have restrictions on things such as the number of withdrawals you can make from the account, so research carefully,” said James Jones from Poor Credit Loans 4 You.  http://www.poor-credit-loans-4-you.co.uk/poor-credit-loa ...

Amongst the worst paying Isas out there is the Cheltenham & Gloucester’s cash Isa, which offers a minuscule 0.05 per cent, or just 50p interest on each £1,000 savings in your account over a year.

People end up with their money in these accounts because they are lured in by bonus interest rates that disappear (Normally after 12 months) and one in ten variable rate accounts launched last month carry a bonus that will likely drop to a bad interest rate when the bonus rate runs out.

Kevin Mountford, savings expert at comparison site Moneysupermarket, says: ‘Once these initial bonuses disappear, savers are left with poor-paying accounts. If your savings are in a variable account earning less than 2per cent, then you should move your money.’

The average interest rate for an Isa before the credit crunch hit in 2007 was 5.58 per cent (or £558 on every £10,000 in the account), in todays economy it is difficult to get anywhere near that figure.

Research by the data analysts Defaqto shows that last year, banks and building societies launched 58 variable-rate cash Isas and at the same time closed many existing accounts to new savers.

David Black, banking specialist at Defaqto says, ‘From the providers point of view, it is much cheaper to launch an account with an attractive headline rate than to pay that rate on all its existing accounts as well.’

“If you want to start earning more on your Isa, you could transfer your money to a different, better paying Isa. Transferring your money from one Isa to another is a relatively easy step, however you should make sure of a few things before you start any transfer, such as if the Isa your looking to move your money to even accepts transfers, as there are plenty that don’t, also how accessible your savings will be,” said James Jones from Poor Credit Loans 4 You. http://www.poor-credit-loans-4-you.co.uk/personal-loans- ...

When checking your current Isa you should be careful and clearly check the name of the one you have as they are often re-launched under similar or identical names, yet the newer one will offer higher interest rates.

C&G Cash is not the only culprit but Halifax also offer extremely low rates on some of their Isas and have one Isa which offers a pitiful 0.1 per cent, but they are not the only ones and The Royal Bank of Scotland and Barclays Cash Isa, both offer the same dreadful rate, even though these are closed to new customers, you may still have your savings in there, if so, you may want to transfer your savings elsewhere to earn better interest.

Here are some of the best easy access Isas around at the moment, many of which include bonus rates, so you may want to move your money or shares when the bonus period expires. (Correct as of 12th January) They are:

· Nationwide Online Isa (Min investment of £25,000) – Pays 3.10% - Includes a bonus of 1.75 percentage points on balances of £1,000 plus, rising to 2.1 points on £25,000 or more. Bonus paid until 31 January 2013. On sale from 11 November.
· AA Savings Internet Access Isa (Min investment of £500) – Pays 3.0.5% - You cannot transfer savings into your Cash Isa from other banks or building society into this account.
· ING Direct – Pays 3.00% - Includes 2 percentage point bonus for a year.
· Santander Flexible Isa 4 – Pays 2.81% - For 12 months the rate will remain 2.31% above Bank of England base rate and guaranteed never to drop below 2.81% but you cannot transfer savings into your Cash Isa from other banks or building societies.
· Virgin Easy Access Cash Isa – Pays 2.85% - No Bonuses on this Isa (this is available through Northern Rock, which is part of Virgin Money).

“There are many great deals out there on Isas, so don’t be afraid to look around and move your money from one bank to another as the amount of interest you could be earning can be a massive difference. When you are transferring your money it is vital to make sure to check the Isa you applying for carefully, as there are many different Isas out there with similar names and yet one could offer 0.1 per cent interest while the other is offering 3 per cent interest,” said James Jones from Poor Credit Loans 4 You.

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For help, phone 0800 215 5860
Or visit: http://www.poor-credit-loans-4-you.co.uk/quick-poor-cred ...

~Ends~

Notes for Editor:
Loans 4 You of London Ltd
Innovation Centre
Monks Brook
PO30 5WB
United Kingdom

Poor Credit Loans 4 You was formed in order to ensure people with poor credit had access to specialist help in securing the poor credit loans they need.

From its UK head office in Monks Brook, Loans 4 You operates across Britain, sourcing poor credit loans for people with poor credit.

Poor Credit Loans 4 You holds a Consumer Credit Licence issued by the Office of Fair Trading.

Poor Credit Loans 4 You is also registered with the Information Commissioner’s Office for Data Protection.

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Poor Credit Loans is a top UK specialist for Poor Credit Loans for people from all over the UK.

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