Hi to you all,

Please could anyone comment on whether this is a good ISA to invest £6600?

http://www.leedsbuildingsociety.co.uk/savi...buster_isa.html

Thanks

Cash ISA's are supposed to be fairly simple savings accounts with a choice of variable of fixed rates , this is the most complicated cash ISA i've seen .
If this ISA was available over the previous 12 months where the RPI has been approx average of 4.2% plus there bit of interest would of made this ISA on a par with most NORMAL ISA's , furthermore i'd expect 90% of Joe Public wouldn't even know what the RPI is , a pointless ISA imo that i suspect will have few takers .

gibbo500, thanks for posting, looks interesting.

It looks quite suitable for us, like a better paying NS&I index linked certificate but in an ISA.

Best I've seen so far I think.

As I understand it this is RPI + 2% (tax-free, as per standard ISA). Considering that would have given me 6.2% this year alone, and will give more if inflation rises it is as good an investment as any IMO. Just a shame it's an ISA and therefore, limited. You also have to lock it up for at least a year. You may be better off with a instant access 6.2% if you can get one.

The wording is a bit confusing, but it is percentage change in the price of goods between two dates (inflation) + 2% and not the difference in % of inflation between two dates + 2%.

Needs clarification
you will receive an interest rate equivalent to the percentage change in RPI between 29 February 2008 and 28 February 2009 plus 2.00% tax free§

So if the rpi 2008 is 4.1 and the rpi in 2009 is 5.1 then % change is 24.3 plus 2% 26.3% tax free.....yipppppppppppppppppppppppeeeeee
I dont think so the Leeds need to clarify.

I correct myself......might be an interesting punt.

What happens is inflation is very high?
If there was a large rise in RPI between the dates set out below, you would still receive
inflation plus 2.00% tax-free§. For example, if the percentage change in RPI was 12%, you would receive
12% + 2.00% = 14.00% tax-free§.

Negative points to consider ..............

1)Basically Locked in until 31.05.2010
2)Should you wish to withdraw or transfer before then there are very heavy penalties .
3)The ISA does not start until 31.05.08 until then all cash will earn the current base rate , 5.25 at the mo .
4) If Deflation occurs , which is a possibility as cash and spending become tighter and if the RPI goes to zero { unlikely } all you get is the 2% , should deflation go negative by -2% you only get your money back .

I'd rather have a Lloyds 6.5% 9k min or Nationwide 6.15% £1 min both 12 month fixed

You've mis-interpreted that:

Thanks to you all for the advice.

I think i will go for the Nationwide as i dont have the £9000 for the Lloyds TSB. Is it correct, you can you only apply in branch for the Nationwide Isa?

Cheers

Yes , this 6.15% has been around since last summer , not sure how long it will last . Do note as it's FIXED for one year you can't add to it later if you havn't got the full £3,600 .

If your NOT a member you MUST take your Driving licence or passport and at least 2 other RECENT bills /statements etc. , this applies to opening all ISA's if your not already customer .

Thanks grey shark, your advice much appreciated.

I'd mention that perhaps you should also consider Barclays' 6.5% (variable) ISA, but Grey Shark gets cross with me when I do, so... I won't...

Currently, I'm likely to add a further £3600 to my Lloyds-TSB fixed-rate ISA, but, as you say, if you can't bring £9k of ISA funds to it, then the Lloyds-TSB ISA interest rate is mediocre at best.

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It's RPI + 2% now. With RPI at 5%, that makes 7% tax free. Sounds very appealing.

My only concern is that RPI may actually fall as the HPC progresses, as it includes housing costs. Any views on this?

I've been through this on either this thread or another one. The 1st-year payout assessment period for the Leeds inflation linked ISA is April 08 to April 09. We've been above 4% RPI since April 08, and the BoE has confirmed its going higher. We've got rising gas and water prices into the Winter, rising shop prices in Autumn and ongoing pay rise negotiations probably peaking in April 09.

How anyone thinks inflation WON'T be way, way above target during the April 08 - April 09 assessment period for this product, I don't know...

Basically, 4%+ for the first year of this product IS IN THE BAG. So if you add on the bonus of 2.5%, 6.5% for the first invested year is as good as any fixed rate deal.

Stay with this product for 1 year, then, as I understand it, you can transfer without penalty to a fixed interest product if you think interest rates are going to fall...

Can you make deposits to this ISA after it is open?

Edit: CS have told me no you can't.