ISA’s – Making Use of Your Tax Free Savings Allowance

Most people are vaguely aware of the fact that they can save some money on a tax free basis every year, some would even be able to tell you that it can be done through something called and Individual Savings Account (ISA). It is the case however that relatively few people make use of ISA’s as an investment vehicle. Part of the reason for this can perhaps be found in the fact that ISA’s are traditionally seen as quite complex and difficult to manage. The UK government tried to address this by overhauling the rules governing ISA’s, with new rules coming into effect in April 2008. The purpose of this short article is to briefly explain how ISA’s work and what the implications of the new ISA rules are for new investors.

Under the ISA scheme an individual can invest up to £7200 per tax year on a tax free basis. There are two way of doing this, they are:

Cash ISA’s: Cash ISA’s are, as the name suggest, simply cash amounts that are saved under the scheme. The most important thing to remember is that there is a contribution limit of £3600 per tax year if you choose to invest in a Cash ISA.

Stocks and Shares ISA’s: With this type of ISA investors invest in the stock market, usually through some form of managed investment fund. The limit for investment is the full £7200 ISA allowance. It should be noted that the amount that you can put in this type of ISA will be directly affected by how much you have already placed in a Cash ISA. If, for example, you invested £2000 in a Cash ISA, you can only invest a further £5200 in a ‘Stocks and Shares ISA.

You can invest your funds in a Cash ISA, in a Stock and Shares ISA, or a combination of both. If you want to make full use of your Cash ISA allowance and also invest your full ISA allowance (£7200) it will of course have to be a combination since there is a £3600 limit on the Cash ISA.

The big question that investors often ask is whether they should go for cash or ‘stocks and shares’.

The main benefits of Cash ISA’s are dependability and security. Placing your money in a Cash ISA is comparable to putting your money in a bank savings account, but with the added benefit that any interest gained will be tax free. It is therefore the perfect place to invest money to earn interest and maximise tax savings while still having relatively easy access to your funds.

Stocks and Shares ISA’s will be invested in the stock market. Any capital gains that you make on your investment will be tax free, but you will have to keep in mind that you are exposing yourself to the ‘ups and downs’ of the market and that your investment could therefore both increase and decrease in value. Stocks ISA’s, in common with other stock market investments, should primarily be seen as a long term investment.
It is relatively easy to take out an ISA since they are offered by many banks, building societies and investment fund managers. As with all financial products you should be careful to read the small print before committing yourself. It is also always a good idea to get independent advice before making major financial decisions.

Summary:

• ISA stand for ‘Individual Savings Account’ and refers to the amount that you can save tax free every year.
• The rules governing ISA’s have recently been simplified, making it much easier to make use of this very important investment channel.
• There are two types of ISA namely ‘Cash ISA’s’ and ‘Stocks and Shares ISA’s’
• Cash ISA’s are ideal for short term financial management while shares ISA’s should be seen as long term investment vehicles.

Instant access accounts explained

An instant access account is a savings account that does exactly as the name describes, it gives you instant access to the money in your savings account. It is a savings account that lets you add and withdraw money to the account whenever you want to, in most cases without charging you to do so. Most banks offer some form of savings account with instant access. The details and policies for accounts like these will vary from bank to bank however there are certain features of the account that you can expect to be the same if not similar in all situations.

Most banks place a few guidelines on how their instant access accounts can be used. An instant access account is usually an account that accumulates interest. There is often a minimum opening balance that you will pay to the bank when you first open the account. In some cases, there will be a minimum deposit amount and other times a minimum balance requirement as well.

For full details on the minimum conditions and requirements for the account that you are thinking of opening, you can speak to an advisor at the bank or read through the conditions on a web site or brochure. It also helps to know all of the proof of address and identification that will be required.

Common Features of Instant Access Accounts:

• Minimum opening balance
• Minimum withdrawal amount
• Minimum addition/deposit amounts
• Minimum required balance
• Interest bearing

As you shop around and compare various instant access type accounts you could compare account policies to ensure you get the best interest rates and minimal account-related fees. You will find that certain characteristics are common among accounts of this type. They provide you the account holder with unlimited access to your account. This would usually include free and unlimited withdrawals. The interest earned on these accounts is most often calculated daily and then paid out to customers on an annual basis. As always, the exact details of an instant access account will vary from bank to bank so be sure to read carefully through the materials that detail the account features.

The majority of high street banks offer some form of instant access account. Traditionally, you would be able to open new instant access accounts at any branch or even online (though proof of ID will often need to be sent to the account provider or taken to a local branch if they have an offline presence).

ISA’s – Making Use of Your Tax Free Savings Allowance

Most people are vaguely aware of the fact that they can save some money on a tax free basis every year, some would even be able to tell you that it can be done through something called and Individual Savings Account (ISA). It is the case however that relatively few people make use of ISA’s as an investment vehicle.

Part of the reason for this can perhaps be found in the fact that ISA’s are traditionally seen as quite complex and difficult to manage. The UK government tried to address this by overhauling the rules governing ISA’s, with new rules coming into effect in April 2008. The purpose of this short article is to briefly explain how ISA’s work and what the implications of the new ISA rules are for new investors.

Under the ISA scheme an individual can invest up to £7200 per tax year on a tax free basis. There are two way of doing this, they are:

Cash ISA’s: Cash ISA’s are, as the name suggest, simply cash amounts that are saved under the scheme. The most important thing to remember is that there is a contribution limit of £3600 per tax year if you choose to invest in a Cash ISA.

Stocks and Shares ISA’s: With this type of ISA investors invest in the stock market, usually through some form of managed investment fund. The limit for investment is the full £7200 ISA allowance. It should be noted that the amount that you can put in this type of ISA will be directly affected by how much you have already placed in a Cash ISA. If, for example, you invested £2000 in a Cash ISA, you can only invest a further £5200 in a ‘Stocks and Shares ISA.

You can invest your funds in a Cash ISA, in a Stock and Shares ISA, or a combination of both. If you want to make full use of your Cash ISA allowance and also invest your full ISA allowance (£7200) it will of course have to be a combination since there is a £3600 limit on the Cash ISA.

The big question that investors often ask is whether they should go for cash or ‘stocks and shares’.

The main benefits of Cash ISA’s are dependability and security. Placing your money in a Cash ISA is comparable to putting your money in a bank savings account, but with the added benefit that any interest gained will be tax free. It is therefore the perfect place to invest money to earn interest and maximise tax savings while still having relatively easy access to your funds.

Stocks and Shares ISA’s will be invested in the stock market. Any capital gains that you make on your investment will be tax free, but you will have to keep in mind that you are exposing yourself to the ‘ups and downs’ of the market and that your investment could therefore both increase and decrease in value. Stocks ISA’s, in common with other stock market investments, should primarily be seen as a long term investment.

It is relatively easy to take out an ISA since they are offered by many banks, building societies and investment fund managers. As with all financial products you should be careful to read the small print before committing yourself. It is also always a good idea to get independent advice before making major financial decisions.

Summary:

• ISA stand for ‘Individual Savings Account’ and refers to the amount that you can save tax free every year.
• The rules governing ISA’s have recently been simplified, making it much easier to make use of this very important investment channel.
• There are two types of ISA namely ‘Cash ISA’s’ and ‘Stocks and Shares ISA’s’
• Cash ISA’s are ideal for short term financial management while shares ISA’s should be seen as long term investment vehicles.

Savings Accounts – What Are Your Options?

Whether times are good or bad, deciding where to place that little nest egg of savings is never easy.

There are usually two primary considerations that most savers try to balance – the safety and security of their savings versus the return (earnings) on them.

In this marketplace the offerings and conditions change almost daily so research will always be necessary and it is highly advisable to consult a duly qualified and registered independent expert before making any decisions. There are though a few general points to consider at the start.

High variable returns – high risk.

Some potential locations for savings offer an uncertain future. The returns are not guaranteed and the value of the savings can go down as well as up. Against this if things ‘go well’ than the earnings and growth of the nest egg can be spectacular.

Examples of this type of saving and investment would be standard stocks and shares portfolios, non-government backed private bonds, currency trading linked savings and commodities based products that bet upon oil or gold prices etc.

In these types of savings and investment schemes, the ‘nest egg’ may rise in value consistently, it may go up-and-down, or it may decline dramatically to near zero and be entirely lost. Schemes of this nature typically may be better suited to corporate entities or very wealthy individuals – they may be seen as too risky for the average saver/investor.

Moderate level returns – balanced risk.

Some products offer the possibility of higher returns without putting the entire savings at risk. These usually involve the saver/investor passing the savings to a brokerage company and specifying which percentages of it are to be invested where. It may be, as an example, that 50% of the fund is invested in government-backed bonds that guarantee a return of ‘x’ percent after several years. The other 50% could be split 25% going to a fixed interest guaranteed scheme and the remaining 25% used to play the riskier stocks and shares markets.

In these schemes the investor minimises their risks of total catastrophe but are prepared to take higher risks with a small percentage to hopefully achieve higher gains.

Once again these schemes tend to be normally utilised by people with larger sums to invest and who are prepared to spend time monitoring the performance of their savings in the various marketplaces.

Specified level returns – lower to zero risk.

For the majority of ordinary savers and investors, the idea of gambling with all or part of their savings may prove too intimidating to contemplate. To achieve a reasonable rate of return on their funds with minimal risk means that they will probably be looking at one of a range of more conventional savings products.

• Tax-Free savings with guaranteed returns. Examples of this include ISAs where a lump sum is invested for a specified period and often a fixed percentage or minimum percentage profit is guaranteed. The savings may not be accessible in full ahead of the maturity period without incurring tax penalties.
• Fixed rate ‘notice period accounts’. In these products the savings are deposited into a savings account and usually receive preferential interest rates because the money cannot be withdrawn by the saver without giving 30, 60 or 90 days notice to the bank or building society.
• Instant Access Savings Accounts - these also offer preferential interest rates but with immediate access to the savings if they are needed.
• Bonds. It is possible to purchase bonds through banks, building societies and brokers. If these are government backed with a guaranteed interest payment at maturity (say 5 years) they may be described as ‘GILTS’. It is worth noting that not all bonds are government backed or totally secure.
• Premium bonds. These offer no interest at all but the money is safe and there is a chance of winning a significant sum tax-free.

As always, research and advice will highlight a vast number of options but always be sure that the position is totally understood from a risk, guarantee and potential return viewpoint before depositing those precious savings!

• Savings can be used to earn money and grow the ‘nest egg’
• Some savings and investment areas offer potential high returns but are also high-risk.
• Savings schemes can be found that are a mixture of guaranteed and riskier investments.
• Many standard savings schemes offer specified levels of growth with little if any risk to the funds.

Investing in Premium Bonds

Serious investment advisors would normally throw up their hands in horror at the suggestion of playing the lottery as an investment strategy. There is one form of ‘lottery’ however that could be considered as ‘safe as houses’ in the sense that you will always get out at least what you put in: Premium Bonds.

Premium Bonds are administered by National Savings and Investments a government department controlled by the Treasury. NS&I was originally set up as the Post Office Savings Bank (founded 1861) and its purpose since its inception was to offer ‘ordinary investors’ the chance to invest their money in ‘safe’ investments.

As such it still offers a wide variety of savings and investment products. Of these Premium Bonds are by far the most popular.

Premium Bonds are sold in £1 units and an individual investor can invest up to £30 000. By buying a premium a Premium Bond you are effectively lending money to the government with the understanding that your investment will be honoured and that you will be paid back if and when you wish. This is the reason why Premium Bonds are traditionally thought of as a very safe bet, almost on a par with stashing your money under the pillow! (Although it is obviously even less risky than doing that) Since it is the Government that guarantees your funds it would require a meltdown so severe that it brings down the whole economic system, and with it the government, for you to lose your money.

We have established that Premium Bonds are generally considered to be one of the safest investment vehicles around, but what about return on investment? This is where it becomes interesting and where the ‘lottery like’ aspect comes in. Each Premium Bond that you buy is allocated a unique number and this number is automatically entered into a series of draws that takes place on a regular basis. If your number comes up you will win a cash prize of up to one million dollars. This is of course a substantial incentive but it should be remembered that no interest whatsoever is paid on Premium Bonds and that the only potential income associated with them is the cash prizes.

One very attractive aspect of Premium Bonds is that they are offered as a tax free investment. If you do win a prize, and about a million people do each month, you will not have to pay tax on it. Your gains will also not affect your Capital Gains Tax position and you do not have to enter it on your self assessment tax form.

The most important thing to remember is that, although Premiums Bonds are considered to be ultra-safe, there is absolutely no guarantee of a specific return on investment. It is true that a great many prizes are offered each month but that still does not mean that you can ‘bank’ on achieving a certain result. Premium Bonds should therefore be seen as a safe place to ‘store’ money but they are perhaps not the best investment vehicle if you are looking for solid, dependable, investment growth.

If you do decide to invest in Premium Bonds, you will have to buy a certain minimum amount of bonds with each transaction you make (currently 100). The maximum number that you can take out is 30 000. It is also worth remembering that the more bonds you hold, the better your chances of winning a prize.

Summary:

• Premium Bonds are administered by National Savings and Investments
• Premium Bonds are backed by the Treasury and are therefore considered to be a very safe form of investment
• Each bond is assigned a number that is automatically entered into a cash prize draw
• The minimum amount of bonds that you can buy at a time is 100 and the most that you can hold is 30 000.

Is your money safe?

Savings and other bank accounts by British depositors are guaranteed by the government-backed Financial Services Compensation Scheme up to the figure of £50,000. Despite the recent international crises in the financial world, therefore, for the overwhelming majority of this country’s population, your money is remarkably safe.

Although the most recent figures available relate to 2007, the British Bankers’ Association estimate that only 2% of bank accounts held in Britain contain a balance of more than £50,000 and only 4% show a balance that exceeds £35,000 (according to a report by the BBC on the 30th of September 2008). 98% of all deposits, therefore, are safely guaranteed by the Compensation Scheme.

The introduction of such guarantees was not simply the result of the government looking to protect individual savers, however. It was prompted just as much by the finance industry’s desperate need for the capital represented by so many individual savings accounts. In this regard, banks and building societies have found themselves to be between something of a rock and a hard place.

They still desperately need savers’ deposits. But in order to encourage lending between themselves and to individual customers, they also need interest rates to be low – hence the Bank of England’s drastic one and a half percent reduction in its base rate during the final quarter of 2008. The deposit-takers, therefore, are being pulled in opposite directions. On the one hand, interest rates need to be sufficiently competitive to attract the savings so desperately needs; while those same interest rates also need to follow the underlying trend of the Bank of England base rate. The guarantee to individual savers – the guarantee that makes your money safe – is one of the principal factors in helping to maintain competitive rates for savers.

This is reflected in the way many banks and building societies have actually behaved in recent months. Immediately after the announcement of the 1.5% reduction in the base rate, for example, many savings accounts (especially those offering a fixed rate of interest) were withdrawn from the market. In the aftermath, however, the same banks and building societies had little option but to reintroduce new accounts and new attractions in order to attract the savers’ funds necessary to underwrite their balance sheets.

Although there has been an inevitable period of re-pricing, therefore, banks and building societies remain just as desperate for depositors’ cash and have to offer attractive rates of interest in order to get it. As ever, of course, the longer they get to keep such deposits, the more attractive the rates they are prepared to offer. Many fixed-rate savings accounts, which savers agree to leave on deposit for an agreed term (typically for a year), thus, continue to offer a good deal.

Moreover, they represent a good deal for both the banks, which receive the funds they need to stay in business, and the individual customers, who earn not only an attractive and competitive rate of return on their savings, but also enjoy the comfort of knowing that their money is safe.

Choosing the Best Savings Account

Most people who are fortunate enough to have substantial savings worry about whether their money is working as hard as possible for them. For many this vague worry is as far as they get when it comes to making choices about their savings. They will leave their funds in the same savings account year in and year out without seriously considering if this is indeed the best place for their funds to be. The fact is that there are so many excellent savings products on the market that it would be slightly foolish not to investigate whether your cash is at the right ‘address’. The purpose of this article is to provide a brief overview of the kinds of things that those thinking about moving their savings account should be asking. The most important of these questions are:

Where can I get the best return?

Notice that the heading reads ‘the best return’ and not merely ‘the best interest’. This is because banks will often try to lure customers with promises of excellent rates of interest and then make their buck by levying substantial charges for the ‘privilege’ of an account that earns so much interest! It could also be that a higher interest rate on an account is merely a ‘bonus rate’ that will expire after a few months. It is very important, in light of this, to do a few calculations to determine the ‘bottom line’ before committing to a specific account.

Another thing that you will need to consider is that you will have to pay tax on any interest that you will earn on your savings. The very best rate of return will therefore be achieved by using the one form of savings account that is tax free (at least up to a point). I am referring of course to a ‘Cash ISA’ where you can invest up to £3600 in cash on a tax free basis. It would therefore make sense to first use your ISA allowance before making further decisions on returns on investment.

How much access do I need to my funds?

As a general rule accounts that place restrictions on how easily you can access your money pay better interest than vice versa. Bonds and fixed terms deposits are therefore very good options if you are quite sure that you will not need your savings on very short notice. It would be good to do a bit of homework before you make this decision however since some instant access savings accounts offer rates that compare quite favourably with those of fixed term deposits.

Do I need to earn an income from my savings?

Many savings accounts pay interest irregularly (e.g. once a year on the anniversary of the opening of the account). There are others however that will give you the option to draw down interest income from your account on a monthly basis. This would of course be quite an important feature for those who are interested in earning a regular income from their savings.

Once you have decided on the features that you are looking for in a savings account you will have to do some work in order to find an account from a respected provider that matches your preferences as closely possible. Most financial institutions will be only too happy to do everything possible to help you to set up the account as quickly and painlessly as possible. Once you have decided on your ideal account it is important not to ‘rest on your laurels’ but to continually evaluate whether the account that you are holding is still the best option for you.

Summary:

• There are many excellent savings products around and it is therefore very important to shop around to find the best deal.
• A good rate of return is one of the most important considerations when choosing a savings account.
• Ease of access is another issue with term deposits generally paying higher rates of interest.
• Those who want to withdraw regular interest income from their savings accounts should make sure that the product that they choose will allow this.

Instant Access Accounts explained

The banks and building societies offer quite literally hundreds of different savings accounts and products all designed to encourage the customer to save with them.

These products vary significantly from one to another and their suitability will depend very much upon a customer’s individual circumstances and needs.

There isn’t space here to describe them all but one classic offering is ‘the savings account’. This type of account will often break down into two basic types:

• Those that normally ask the customer to give some notice before the savings are withdrawn – typically these will be called 30, 60 or 90 day accounts to indicate how much notice the customer will need to give before they can gain access to their savings.

• Instant Access Accounts. These usually offer immediate and unrestricted access to savings via cheque, card or ATM etc.

Notice accounts are the traditional savings products that institutions have offered their clients for centuries. As the customer normally has to give a notice period before withdrawing funds, the bank or building society will therefore be able to keep the money for a longer period ‘on average’. This means they often offer customers a higher rate of interest with notice accounts than on some other types of savings accounts or products.

These sorts of savings arrangements may not suit all savers though. In today’s world people sometimes want faster and unrestricted access to their savings and having to wait 30, 60 or 90 days is not always convenient.

So the Instant Access Account was developed to offer the customer more choice.

Instant Access Accounts were designed to be very flexible. They often seek to offer customers a better interest rate than that available with a normal ‘current’ banking account AND instant, or more or less instant, access to the funds when they need them. This can prove very useful to some customers, although on the whole Instant Access Accounts may offer lower interest rates than those available through the Notice Account savings schemes.

The world of financial services moves fast though and new offerings are continually appearing. To some extent, the differences between notice period and instant access accounts are diminishing.

Over recent years new types of Instant Access Account have appeared. These are ‘hybrids’ that are a mixture of the traditional Notice and Instant Access accounts with features of both.

Some of these new Instant Access Accounts may offer the higher interest rates usually found with the traditional notice accounts, while at the same time offering more flexible access to the savings.

They may offer, for example, 3 free withdrawals a year without risking a reduction in the interest rate paid on savings.

In the final analysis, the banks and building societies will usually have available a product or service that will meet the needs of those savers looking for a good interest rate coupled with flexible access to their funds. This may be one of the familiar ‘Instant Access Accounts’ or one of the newer hybrids.

• Instant Access Accounts usually offer higher rates of interest than current accounts.

• Notice Period Accounts usually offer higher rates of interest than current or Instant Access Accounts.

• Instant Access Accounts typically give immediate and unrestricted access to the savings if needed.
• New hybrid accounts have emerged which have some characteristics of both Notice and Instant Access accounts.

Introduction to savings accounts

Any introduction to savings accounts these days is going to make quite sombre and gloomy reading. This reason for this can be pinned quite squarely on the recent drastic reductions in the Bank of England base rate, which has plunged to its lowest ever. And it is that rate, of course, which determines the interest rate not only paid by borrowers, but also that received by savers. The current rate might be potentially good news for borrowers, therefore, but it is far less so for savers.

Figures released by the Bank of England and published in the Guardian newspaper on the 12th of January 2009, for example, revealed that the rates of interest currently available on most forms of saving account is less than 1%.

With the base rate at an all-time low of 1.5%, of course, such poor returns on savings accounts has to be expected. Nevertheless, the overall shortage of funds available for lending counts to the savers’ advantage because it means that banks and building societies are practically desperate for cash deposits. Although it might not seem like it, therefore, there remains quite keen competition amongst such deposit-takers for savers’ funds.

Not only are banks and building societies keen to attract cash savings, they are especially eager to attract longer-term rather than short-term deposits. The rates of interest offered on notice accounts – where advance notice of an intended withdrawal of anything between 30 and 90 days is required – remain slightly higher than the rates offered on instant access savings accounts. If you are able to tie your money up for at least as long as the period of notice allows, therefore, it should be possible to secure a better rate of interest on your savings. Nevertheless, the low rate of the underlying interest rate is eroding the wide differences between rates offered on notice, compared to instant access, savings accounts that would have been apparent a year ago, for example.

Slightly higher interest rates again should still be available if you are in a position to tie up your savings for a still longer period of time in a savings bond. A bond is effectively your loan to the deposit-taker for a fixed period, at a given rate of interest, and at the end of which period, you will receive back the money you initially lent, plus any interest earned on the loan. Once the bond has been purchased, therefore, there is generally no provision for you to gain access to those savings by redeeming the bond early and it will be necessary to wait until the agreed maturity of the bond. Because the deposit-taker has your money for longer and the more or less certain knowledge that you will not be able to reclaim it before the maturity date of the bond, this form of saving generally represents the highest rate of interest available.

The net value of any savings, however, also need to take into account any income tax that has to be paid on the earnings and no introduction to savings accounts would be complete without reference to the Individual Savings Account, or ISA. This represents a way of enjoying tax free income from savings up to the maximum permitted in an ISA of £3,600. The tax-free incentive, moreover, has the potential for turning an otherwise unattractive rate of return on your savings into one that is at least inflation-proof.

Instant Access Accounts explained

The banks and building societies offer quite literally hundreds of different savings accounts and products all designed to encourage the customer to save with them.

These products vary significantly from one to another and their suitability will depend very much upon a customer’s individual circumstances and needs.

There isn’t space here to describe them all but one classic offering is ‘the savings account’. This type of account will often break down into two basic types:

• Those that normally ask the customer to give some notice before the savings are withdrawn – typically these will be called 30, 60 or 90 day accounts to indicate how much notice the customer will need to give before they can gain access to their savings.
• Instant Access Accounts. These usually offer immediate and unrestricted access to savings via cheque, card or ATM etc.

Notice accounts are the traditional savings products that institutions have offered their clients for centuries. As the customer normally has to give a notice period before withdrawing funds, the bank or building society will therefore be able to keep the money for a longer period ‘on average’. This means they often offer customers a higher rate of interest with notice accounts than on some other types of savings accounts or products.

These sorts of savings arrangements may not suit all savers though. In today’s world people sometimes want faster and unrestricted access to their savings and having to wait 30, 60 or 90 days is not always convenient.

So the Instant Access Account was developed to offer the customer more choice.

Instant Access Accounts were designed to be very flexible. They often seek to offer customers a better interest rate than that available with a normal ‘current’ banking account AND instant, or more or less instant, access to the funds when they need them. This can prove very useful to some customers, although on the whole Instant Access Accounts may offer lower interest rates than those available through the Notice Account savings schemes.

The world of financial services moves fast though and new offerings are continually appearing. To some extent, the differences between notice period and instant access accounts are diminishing.

Over recent years new types of Instant Access Account have appeared. These are ‘hybrids’ that are a mixture of the traditional Notice and Instant Access accounts with features of both.

Some of these new Instant Access Accounts may offer the higher interest rates usually found with the traditional notice accounts, while at the same time offering more flexible access to the savings.

They may offer, for example, 3 free withdrawals a year without risking a reduction in the interest rate paid on savings.

In the final analysis, the banks and building societies will usually have available a product or service that will meet the needs of those savers looking for a good interest rate coupled with flexible access to their funds. This may be one of the familiar ‘Instant Access Accounts’ or one of the newer hybrids.

• Instant Access Accounts usually offer higher rates of interest than current accounts.
• Notice Period Accounts usually offer higher rates of interest than current or Instant Access Accounts.
• Instant Access Accounts typically give immediate and unrestricted access to the savings if needed.
• New hybrid accounts have emerged which have some characteristics of both Notice and Instant Access accounts.