Review of Royal Bank of Scotland Fixed Rate ISA
An ISA is a tax efficient way to save and stands for Individual Savings Account. An ISA lets you pay little or no tax on the interest your savings and investments make making them a popular choice for saving large amounts of money.
They have become less popular since the new PSA (Personal Savings Allowance) has allowed lower rate tax payers to save up to £1000 tax-free and higher rate tax payers up to £500. As many current accounts are now offering competitive rates of interest, many people are moving away from ISAs.
However, as your tax-free amount is much higher in an ISA, there are still opportunities for savers to make the most of their money. Check out our comparison tables for latest interest rates.
What do RBS offer?
RBS offer two kinds of tax-free ISA. Their fixed rate ISA and their Instant Cash ISA.
Features of their Fixed Rate ISA:
- Have a fixed interest rate on your cash ISA meaning you'll know in advance what your savings will earn
- You can choose a term that suits you , either one or two years
- You can keep all the interest helping your savings grow faster
- You will be able to make transfers in and bring all your ISAs together in one place
You will earn a higher rate of interest on the two year plan and for any amount above £25,000.
Useful to Know
- As this is a Fixed Rate ISA, you cannot withdraw your money during the agreed term. If you do choose to withdraw your money then you incur an Early Closure Charge. They offer both one year and two year terms so be sure to pick one that’s right for you
- The minimum deposit is £1,000
- You will need your National Insurance Number to apply for any ISA
RBS is one of the few banks that offer a Fixed Rate ISA for one year with many offering a two year minimum and some up to five year minimums. For many people this time frame isn’t convenient and so RBS are offering an easy way for savers to take the plunge and begin their savings. However, they do not currently offer the highest rate of interest on the market.
What is an ISA?
Paying into an ISA is called ‘subscribing’. You can subscribe to one of each type of ISA each tax year, providing you do not subscribe more than your annual ISA allowance. The current annual ISA allowance is £20,000.
ISAs are a good idea whatever your savings goal. With certain types of cash ISAs, you have instant access to your money, which makes it a flexible way to plan your finances.
It’s also important to remember that ISA allowance limits apply to everyone on an individual basis, so if you’re married or in a relationship, you can both hold your own ISA, each with the full allowance.