Halifax launches ISA Direct Reward

Halifax has announced the launch of a new product - the ISA Direct Reward, offering a guaranteed interest rate of 3.00% AER/Gross for the first year. The product will complement the existing range of ISA products and is available from 24th February 2009.

Key Features:

Guaranteed 3.00% rate of interest (AER/Gross) for 12 months from date of first deposit
Minimum investment of £1,000 which must be maintained throughout the 12 month period
Unlimited deposits (limit of £3,600 applies for tax year)
Up to four withdrawals can be made in the first 12 months
Can be opened in branch, by phone or online
Tax free interest paid annually on 5th April
Transfers in of current and or/previous years ISA funds accepted
Security of a fixed rate but with greater flexibility

Unlike traditional fixed rate products, the ISA Direct Reward allows savers to make additional deposits up to the annual £3,600 limit for the tax year. Furthermore, savers can invest an additional £39,600 from previous tax free cash ISA funds.

The ISA Direct Reward also allows savers to make up to four withdrawals without notice during the 12 month reward period should they need unexpected access to their cash.

Use it, don't lose it

Savers have just over five weeks to take advantage of the 2008/09 tax free allowance, as once the 5th April deadline passes, savers lose their tax free entitlement for that year. Halifax is urging all current and potential savers to make the most of this allowance.

Flavia Palacios Umana, head of Halifax Savings products, said: "By launching this product now, we hope to encourage savers to maximise their tax free savings in both the 2008/09 and 2009/10 tax years. The ISA Direct Reward gives savers a guaranteed rate over the next 12 months and offers a degree of flexibility not provided by traditional fixed rate offers."

Commenting on the ISA Direct Reward, Andrew Hagger, head of press and PR at Moneynet.co.uk said: "This ISA Direct Reward from Halifax is a great all round package. The fixed rate of 3% is competitive in the current market, but it also comes with additional product features that serious savers will appreciate.

"The fix period of only 12 months, plus the flexibility to make up to 4 withdrawals and ability to transfer in previous tax free balances will tick all the right boxes for many savers."