Time is running out to meet the 5th April end of tax year deadline and so this is your last opportunity to protect your 2013/14 Cash ISA allowance (£5,760) from the taxman. To help you know where our customers are putting their money, we feature our Top 5 most popular Cash ISA plans.
Capital protected
All of the deposit plans below are fully capital protected and eligible for FSCS protection up to the normal deposit limits.
1. The potential for 4.85% annual income
The Target Income Deposit Plan from Investec offers 4.85% each year provided the value of the FTSE 100 Index at the end of each year is higher than 90% of its value at the start of the plan (subject to averaging). If the Index finishes below 90%, no income will be paid although should it meet the required level on any future anniversary, any missed payments will be added back.
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2. Potential 30% fixed return or any rise in the FTSE if higher
If the FTSE 100 Index finishes higher than its value at the start of the plan, even if this by just one point, the 5 Year Deposit Plus Plan from Investec will pay a 30% fixed return. If the FTSE has risen by more than 30% then you will receive this higher amount, with no upper limit (subject to averaging).
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3. Over 4 times any rise in the FTSE, capped at 40.5%
If you think the FTSE will rise in the medium term, Societe Generale’s UK Super Tracker Deposit Plan will return 4.05 times any rise in the FTSE 100 Index, subject to a maximum return of 40.5% plus your capital back (equivalent to 5.8% compound annual growth).
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4. Potential 7.5% each year and early maturity from year 2 onwards
Gilliat’s Deposit Kick Out plan is dependent on the performance of five FTSE 100 shares and offers a potential return of 7.5% per year (not compounded) as well as the ability to mature early from year 2 onwards. Lloyds Bank plc is the deposit taker.
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5. Potential 4.25% each year and early maturity from year 2 onwards
Investec’s Kick Out Deposit plan differs from Gilliat’s in that your return is dependent on the performance of the FTSE 100 rather than five shares listed in the Index. The plan offers a potential return of 4.25% (not compounded) and can also mature early from year 2 onwards.
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Cash ISA alternatives
Traditional fixed rates
The returns on the above plans are not guaranteed and so if the income or growth return is not achieved, you will only receive a return of initial capital. In this situation you may have been better off with a more traditional fixed rate Cash ISA.
Fixed income investment
For those prepared to put their capital at risk in return for a higher fixed income, one option is our most popular income investment, the Enhanced Income Plan from Investec which offers 6.00% fixed each year, paid to you regardless of the performance of the stock market. Your income is paid as 0.50% each month. The trade off for a fixed income which is over three and half times the current rate of inflation and significantly higher than any return available from fixed rate bonds is that your capital is at risk.
The plan does provide some capital protection against a falling market in that it contains what is known as conditional capital protection. This means that your initial capital will be returned in full unless the FTSE 100 Index falls by more than 50% during the investment term. If it does, and the Index also finishes below its starting level then your original capital will be reduced by 1% for each 1% fall. Therefore, this plan should only be considered if you are prepared to lose some or all of your capital.
How to apply
When you click for more information on any of the above plans you will be able to request a brochure pack which will be sent to you by post and email. With the 2013/14 ISA deadline imminent, you may not receive the postal pack in time so if you wish to proceed, we recommend you print and complete the application form contained within the email brochure pack attachments. The minimum deposit for all of the above plans is £3,000. Arrangement fees apply.
Important note – don’t miss out
Please be aware that in order to process completed 2013/2014 ISA application forms in time they must be received by us no later than Thursday 3rd April 2013 and so the use of next day delivery services should be considered.
Remember that all of the above plans allow you to apply for next year’s Cash ISA allowance at the same time (2014/15 tax year, current limit of £5,940) and they also accept non-ISA deposits. If you have any questions on how to apply please contact our Customer Services team on 0845 308 2525.
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No news, feature article or comment should be seen as a personal recommendation to invest. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment. If you are at all unsure of the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice. Tax treatment depends on your individual circumstances and may be subject to change in the future.
The Top 5 plans listed are structured deposit plans that are capital protected. There is a risk that the company backing the plan or any company associated with the plan may be unable to repay your initial investment and any returns stated. In this event you may be entitled to compensation from the Financial Services Compensation Scheme (FSCS), depending on your individual circumstances. In addition, you may not get back the full amount of your initial investment if the plan is not held for the full term. The past performance of the FTSE 100 Index or shares listed within the Index is not a guide to their future performance.
The Investec Enhanced Income Plan is a structured investment plan that is not capital protected and there may be the risk of losing some or all of your initial investment. There is also a risk that the company backing the plan or any company associated with the plan may be unable to repay your initial investment and any returns stated, in which case you may not be entitled to compensation from the Financial Services Compensation Scheme (FSCS). In addition, you may not get back the full amount invested if the plan is not held for the full term.
