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ISA resolution number 1: Check for bonuses

ISA resolution number 1: Check for bonuses

Category: ISAs

Updated: 22/02/2013
First Published: 21/02/2013

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

With just over six weeks left until the end of the tax year, many savers will be turning their attentions to the ISA market.

Despite the savings sector experiencing a number of rate cuts and withdrawals over the past few months, a large number of providers have begun to review their ISA ranges in preparation for the 2012/13 ISA season.

When looking for the best variable rate ISA, take time to assess whether you want a rate that includes an introductory bonus.

Nearly half of the current top ten variable cash ISAs include hefty introductory bonuses, which boost the initial rate to attract more business. These bonuses will often account for a large portion of the overall rate.

For example, the ISA Saver (Issue 1) from Cheshire Building Society pays a rate of 2.50%, of which 2.00% is a bonus. This means that when the bonus expires on 31.7.14, the rate will revert to just 0.50%.

When opening an account with an introductory bonus,

  1. Check and make a note of when it is due to expire. Doing so will allow you plenty of time to contact your provider to review your savings options before the bonus falls away to reveal the lower rate of return.

What next?

Compare the 10 ten variable ISAs
Find all the best cash ISAs with Savings search

Download your free guide to ISAs

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.