New ISA options from M&S

M&S Money is launching a new fixed rate savings option within the M&S Mini Cash ISA over terms of 1, 2 and 3 years - rates being set at 5.40%, 5.45% and 5.55% gross p.a. respectively. Or 4.32%, 4.36% and 4.44% net.

Mini Cash ISA customers will be able to choose between fixed and variable rates of interest, or split their annual allowance between the two, using one simple application form.

The fixed rate savings product will also be available outside an ISA. Customers saving outside an ISA earn interest net of tax.

This limited offer will be available from February 28th.

Meanwhile, the variable interest rate on the M&S Mini Cash ISA is currently 5.25% AER/tax-free.

Under the fixed rate option within the M&S Mini Cash ISA withdrawals can be made during the fixed term but an early withdrawal charge will apply (£50 for the 1 year term, £75 for the 2 year term, £100 for the 3 year term).

Minimum deposit is £500 up to the Mini Cash ISA allowance of £3,000 per tax year. Transfers from other Cash ISA providers are accepted.

Under the variable rate option, on the other hand, the rate is guaranteed to match Bank of England base rate only until December 31st 2007, currently 5.25% AER/tax free.

15 July 2008 © Moneyextra.com

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