Santander and A&L cash ISA paying 3.50%

This week, Santander and Alliance & Leicester have kick started the ISA season with the launch of its highly competitive Flexible ISA, a market leading variable rate Cash ISA paying a minimum guaranteed rate of 3.50 per cent AER for 1 year.

Flexible ISA guarantees to pay at least 3 per cent above the Bank of England base rate for the first 12 months; and the rate will not fall below the minimum rate of 3.50 per cent for the first 12 month period, so you're guaranteed a competitive return.  Added to that, the account allows penalty free instant access on withdrawals, so savers have the peace of mind of a minimum guaranteed rate but with the flexibility of an instant access account.  Designed to encourage more people to save tax efficiently the account is available to new and existing customers for new ISA subscriptions only with a minimum balance of £1.

Reza Attar-Zadeh, Director of Savings and Investments said: "Cash ISAs continue to play a vital role for tax paying savers.  We urge savers to look at the benefits of saving tax free by making the most of their ISA allowance, as unused allowances are lost forever.  In the current low base rate environment the long term benefits of holding money in an ISA are clear. For example, a lower rate taxpayer would have to find a standard savings account paying at least 4.37 per cent gross to get a return equivalent to 3.50 per cent tax free on our Flexible ISA". 

Santander won the Moneyfacts "Best ISA Provider" at the 2009 Consumer Money Awards.

Michelle Slade from Moneyfacts said "Santander continues to offer savers some of the most competitive deals on the market and its latest Flexible ISA is no exception. The combination of a market leading rate, that is guaranteed to remain at least 3.00% above base rate, plus easy access to funds if required, is likely to make the Flexible ISA extremely popular with savers.

Andrew Hagger from Moneynet commented "Savers seeking a home for their new ISA monies will undoubtedly be attracted by the combination of unlimited penalty free access and a market leading, guaranteed minimum interest rate. The icing on the cake is that if base rate increases in the next 12 months, then so will their ISA returns".

For any ISA saver looking to secure a good return on their existing ISA money, our Direct ISA offers a preferential rate of 2.75 per cent variable for the first 12 months on balance of £9,000 plus or a 2.00 per cent variable on balances of £1, after which a variable, tiered rate will apply depending on the balance of the account.  What's more, customers can access their money at any time without notice or penalty.

For savers also happy to consider an investment and looking for the opportunity of even greater returns, our Super Flexible ISA offers a guaranteed minimum of 5.50 per cent variable for the first 12 months.  In order to benefit from our highest ISA interest rate, savers must be able to put the same amount or more into a Santander qualifying investment at the same time.   The minimum opening balance is £1 and existing ISA money can be transferred in.