Written by Karen Bryan
The Yorkshire Bank Cash ISA 40 Day Notice account, which accepts transfers, is offering a variable rate of 2.5% on balances of more than £24,000. Balances of £1 – £8,999 earn 1.5%, £9,000 – £23,999 earn 2.0%.
The 2.5% rate of interest on the Yorkshire Bank Cash ISA looks attractive. Quite often the highest paying Cash ISA account don’t accept transfers. The most you could earn on a one year fixed rate Cash ISA, accepting transfers, is 2.0% with the Britannia Building Society, (Co-op customers get a higher rate of 2.3%).
You are required to give 40 days notice to make penalty free withdrawals. If you want immediate access, not only will you lose 40 days interest (with a minimum charge of £30), your account will be switched to a Cash ISA instant access account which currently pays 1.6% on balances of £24,000+. Therefore, this account is looking best for savers with Cash ISA pots of £24,000, who don’t want to tie their cash up for too long and are pretty sure that they’ll be able to give the 40 days notice.
What would concern me about putting my savings into the Yorkshire Bank Cash ISA account is the fact the rate of interest is variable. If the rate did suddenly drop soon after I opened the accout, I could end of being worse off than going for a lower fixed rate of interest Cash ISA account, if my savings earned a much lower rate of interest during the 40 day notice period.
Rates correct on 26 August 2013.