Cash ISA Season Hots up, but Savers Beware of the Bonuses
Personal_Finance / ISA's Mar 14, 2012 - 07:41 PM GMTBy: MoneyFacts
The 2012-13 ISA season is gathering pace, with providers showcasing their latest tax-free offerings.
Many of this season’s variable cash ISAs include large introductory bonuses, designed to boost the initial rate and attract customers.
Number of variable cash ISAs |
178 |
Number of variable cash ISAs with introductory bonuses |
40 |
Average cash ISA rate |
1.91% |
Average size of a cash ISA’s introductory bonus |
1.32% |
Source: Moneyfacts.co.uk 14.3.2012 |
|
Louise Holmes, spokesperson for Moneyfacts.co.uk, commented: “Savers looking for a competitive tax-free investment at the moment are spoilt for choice. We have seen a surge in new ISA products over the past few weeks and this is predicted to continue until the beginning of the new tax year in early April.
“Out of the current top five variable ISA rates, four include introductory bonuses equating to a substantial portion of the overall rate.
“Savers looking for a competitive rate must bear in mind that no matter how appealing the initial rate looks, the rate of return will drop significantly once the bonus period expires.
“It would be wise for savers opting for these types of accounts to make a note of when their bonus period is due to expire. This should allow enough time to review savings options, transfer funds to another competitive account and ultimately avoid the disappointment of reverting to a measly return.”
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