Principality 4% regular saver ISA

Principality Building Society kicks off the new ISA season with a regular saver ISA paying a market-leading 4.00% AER tax free, fixed until 5 April 2011.

According to the latest Principality Savings and Spending Survey, only a quarter of people in Wales are planning to open a new Cash ISA for the tax year 2010-2011. Of those that are, 30% say they are looking to save regularly.

James Wright, Marketing Director at Principality Building Society, said: "ISA's are a great way of protecting your interest from the tax-man and with taxes set to rise in the future, we will all be looking for a safe haven for our money.

However, we understand that not every-one can afford to invest a lump sum in April. The regular saver ISA allows you to make monthly payments that will build up over the long term and the fixed rate element means that there will be no rate surprises.

Principality's regular saver ISA helps people make the most of their ISA allowance by encouraging them to save regularly by giving them an interest rate of 4% fixed for a year, providing a guaranteed tax-free return.

To qualify for the ISA, savers need to make a regular monthly investment from as little as £20 up to a maximum of £425, paid by standing order. Principality suggests that savers set up their standing order to pay in to the ISA at the very beginning of each month so they maximise the interest they earn, which is calculated on a daily basis.

Customers that make a £425 cash investment into the Bond each month, on the same date as the date the Bond was opened, will earn £110.50 gross interest when the Bond matures.

For added flexibility, if savers do not make the maximum £425 per month investment, they can still top up their ISA in March next year up to the £5,100 maximum limit, so they can benefit from their full tax-free savings allowance.

James Wright continues: "Getting into the savings habit isn't easy and that's why we have designed an ISA that rewards regular savers. Plus savers get the option to top it up at the end of the ISA year and maximise their ISA allowance."

The initial deposit can be made by cash or cheque, but the following 11 months' payments are made by standing order. Top-ups can be made by cash, cheque or standing order.