Northern Rock maintains interest rates for long term ISA savers

Northern Rock is launching three new issues of its fixed rate cash ISA, offering competitive tax-free interest rates. The new accounts, which are fixed over a choice of either one, three or five years, will be available to open from 2pm today (22 February 2011) with a minimum initial deposit of £500.

Strictly limited issues, the fixed rate cash ISAs (issues 156, 157 and 158) allow transfers from other providers and FRISA 158 maintains a market leading interest rate for longer term ISA savers. The products can be opened either by post or through Northern Rock’s branches and additional deposits (£250 minimum) can be made to the cash ISAs, within HM Revenue and Customs limits (£5,100 pa from April 2010) up to 30 days after the product is withdrawn. After this time, no further deposits will be accepted and all three issues may be withdrawn without notice once fully subscribed.

Interest, which can be added to the account or paid into another account, is paid annually on 30 November. Minimum withdrawals of £250 can be made from the account, subject to a charge equivalent to 60 days’ loss of interest on the amount withdrawn (Issue 156), 120 days’ loss of interest on the amount withdrawn (Issue 157), or 180 days’ loss of interest on the amount withdrawn (Issue 158). If balances fall below £500, our basic rate of interest will be paid (0.10%).

*The tax-free rate is the contractual rate of interest payable where interest is exempt from income tax.
**AER stands for Annual Equivalent Rate and shows what the interest rate would be when interest is paid and added to the capital balance each year.

Further information:

• Limited issues – all three issues may be withdrawn at any time. Once withdrawn no further deposits will be accepted after a period of 30 days.
• Available as fixed rate cash ISAs. Max investment of £5,100 in tax-year 2010-11.
• Charge-free transfers will be allowed from all Northern Rock variable rate accounts, instant access and notice accounts (transfers from Northern Rock internet accounts must be via the nominated bank account). Transfers will also be accepted from other organisations. Withdrawal transfers by CHAPS will be subject to a fee of £35.
• Transfers out will be subject to five business days processing and a charge equivalent to 60 days’ loss of interest (fixed rate cash ISA issue 156), 120 days’ loss of interest (fixed rate cash ISA issue 157), or 180 days’ loss of interest (fixed rate cash ISA issue 158).
• Withdrawals within the fixed rate period will be subject to the same respective loss of interest charges as detailed above. Minimum withdrawal amount is £250.
• Interest will be paid on 30 November in the case of all three issues, and can be accumulated to the account(s), or paid to either another Northern Rock account (subject to the Terms and Conditions of that account) or that of another bank or building society.
• Available via Northern Rock branches or direct by post.
• On expiry of the fixed rate, the interest rate payable will be the prevailing variable rate on Northern Rock’s 30 Day cash ISA excluding any introductory bonuses.
• Charge-free access (there is a £35 charge for withdrawals by CHAPS) will be available for 30 days from maturity (the account will then be subject to 30 days’ notice or 30 days’ loss of interest on the amount withdrawn).

For application forms on all products visit northernrock.co.uk.