Review of Newcastle Building Society’s MaximISA

Written by Karen Bryan

newcastle bsWhen I was researching the Newcastle Building Society Big Home Saver Account, I noticed that the Newcastle offer a ‘MaximISA’ which allows you to split your annual New Individual Savings Accounts (NISA) allowance between different Newcastle accounts. As an example, you could split your annual £15,000 allowance, putting £5,000 into an instant access account, £4,000 into a fixed rate account and deposit £500 a month (totalling £6,000) into a monthly saver account.

Under Her Majesty’s Customs & Revenue (HMRC) regulations you can only open one Cash NISA in each tax year. However as long as you split your allowance between accounts with the same provider, HMRC consider this to be one Cash NISA.

I think that this is a really good idea. Although fixed rate accounts generally pay a higher rate of interest, there are usually withdrawals restrictions and/or penalties. There’s also the risk with a longer fixed rate account that rates of interest will increase when your cash is tied up.

However the downside is that the Newcastle Building Society might not offer the best rates for all types of Cash NISA accounts. For example, a Newcastle fixed rate Cash NISA night offer a competitive rate, but another provider could offer a higher rate on their instant access NISA account.

I had a look around to see if any other financial institutions were offering anything similar to the Newcastle’s MaximISA. It appears that Nationwide also offer the option to split you annual NISA allowance between various accounts, but this isn’t made as obvious as on the Newcastle website.

If this splitting option becomes popular with savers, perhaps more financial institutions will start offering it.