No Better Time to Invest in an ISA, Urges Leading Bank

8th Mar 2007

Northern Ireland consumers are being urged to take advantage of recent interest rate hikes and buoyant stock markets by investing in a tax efficient ISA (Individual Savings Account) before April 5. Ulster Bank is offering up to 100 cash back - 50 cash back to every customer who invests the full ISA allowance of 7,000 for the 2006/7 tax year in addition to 50 for anyone who invests their full 2007/8 allowance by 18th May 2007.

Ulster Bank Head of Product Marketing, Roisin Ryan, says that now is a great time to invest in one of the products.

"The FTSE recently hit a six-year high and with recent interest rate hikes, the current conditions for savings growth are good. Ulster Bank's Cash ISA has a top tier variable interest rate of 5.25% AER, and 100 cash back is another incentive to encourage consumers to take advantage," she says.

Consumers can invest up to 7,000 either entirely in a 'maxi ISA', which is aimed at those who want to invest in stocks and shares, or split, with 3,000 in a 'mini cash ISA' and 4,000 in a 'mini stocks and shares ISA'.

Ms Ryan says that an ISA is an extremely tax efficient means of saving. "With an ISA you can save up to 7,000 each year and not pay tax on the investment - either in terms of interest on the cash element or capital gains through the stocks and shares. This is good news for everyone but particularly for people on higher incomes who are normally taxed at the rate of 40 per cent on all their savings and investment income," she says.

The ISA was launched by the government to encourage people to save for the future. It is effectively a tax-efficient wrapper in which you can hold either stock market-based investments or a traditional savings account.

According to the 2005 UK Budget, more than 16 million people - around one in three adults - then had an ISA and more than 160bn had been subscribed to ISAs since their launch. ISAs replaced personal equity plans (Peps) and the tax exempt special savings accounts (Tessas), which closed to new investors in April 1999.

Over 16s can invest in cash ISAs and over 18s in stocks and shares ISAs. An investor can either have one maxi ISA or two mini ISAs - one of each type - each tax year. The value of stocks and shares in ISAs can fall as well as rise and you may not get back what you have invested. Also past performance is not an indicator of future performance.