Market volatility highlights attractiveness of Abbey's Super ISA

Super ISA offers 8.1 per cent AER tax free until 1 May 2008, providing a Guaranteed Growth Plan (GGP) is also taken out.

The attractiveness of Abbey's Super ISA plan - of which the GGP offers a guaranteed return after a fixed term, regardless of stock market conditions - has been highlighted by the recent volatility of stocks and shares.

The FTSE 100 has risen 0.4 per cent since the start of the year. However, the volatility of the market means there has been a variance of as much as 7.3 per cent from its peak on the 19th February to its trough on 14th March 2007.

Although past performance is not a guide to future performance, this market volatility illustrates the timing and market risk inherent in investing in equities without any form of capital guarantee or protection. Investors can help mitigate this risk when they invest in the Super ISA.

The Super ISA is a cash mini-ISA and offers 8.1 per cent AER tax-free until 1 May 2008 if customers put an equal amount or more into Abbey's tax efficient Guaranteed Growth Plan.

Reza Attar-Zadeh, Head of Savings and Investments at Abbey, said: "Abbey's Super ISA offering is protected against equity volatility. The cash mini ISA element offers 8.1 per cent over one year and the Guaranteed Growth Plan offers a minimum nine per cent return over three years, or 50 per cent of the growth of the FTSE 100 - whichever is higher.

"The benefit of such certainty of return is enormous. Some investors still remain nervous of equity volatility. The FTSE 100 is over five per cent lower than it was at the turn of the Millennium, and the recent volatility highlights the difficulty of timing when to invest."

Abbey has developed a market-leading product to help customers build their savings in a tax-efficient way, while offering certainty of return. The product has been designed both to allow instant access to money placed in the Super ISA offering 8.1 per cent interest, whilst deposits in the Guaranteed Growth Plan are invested for the longer term (three or 5.5 years) offering guarantees both on the money deposited and a minimum return, if the money is left for the full term. The product allows transfers in of existing ISA balances customers may already hold.

Should a customer not wish to put away their money for the longer term, they can save into Abbey's Direct ISA which offers a rate of up to 5.75 per cent.

Super ISA - Highlights

8.1 per cent AER until 1 May 2008, when the Super ISA reverts to Abbey's Direct ISA
Direct ISA offers a highly competitive rate (Currently 5.5 per cent to 5.75 per cent, including a 0.5 per cent bonus until 1 May 2008)
Available to new and existing customers. Free transfer service of cash mini ISAs from other providers
Account offers instant access by telephone, post, internet and cash machine
Interest is calculated daily, and there is no penalty for withdrawal
Minimum investment of £500 per product
Effective rate of 10 per cent for basic rate tax payers or 13.33 per cent for higher rate tax payers

Guaranteed Growth Plan (GGP)

Capital guaranteed with a guaranteed minimum return of nine per cent over a three-year period or 23 per cent over a 5.5-year term
Potentially greater returns, depending on the performance of the FTSE 100 index
Subject to Capital Gains Tax regime, so is therefore more tax efficient than bonds that attract income tax (annual CGT allowance is currently £8,800)
Minimum £500 investment to qualify for Super ISA

Customers can apply for the Super ISA account by visiting, abbey.com.