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Bank Withdraws Inflation Beating ISA

Fri, 27 Aug 2010

The National Counties Building Society has withdrawn its inflation-beating ISA, just 10 days after the tax free savings account was launched. It had been expected that the five year ISA would be offered until September 30th, but it was instead removed at 5pm yesterday after the building society received a greater than expected response.

Savers who requested the forms for the ISA prior to the 5pm deadline will still be able to apply for now, but those savers who missed out will be ruing an opportunity to ensure they are earning money on their savings in a period of high inflation.

The National Counties ISA offered an interest rate of 1 per cent plus the retail price index (RPI) in September each year, so with the RPI currently at 4.8 per cent, savers would be earning 5.8 per cent on their money.

The withdrawal leaves savers with very few bonds, ISAs or savings accounts which guarantee to beat inflation. National Savings and Investments recently withdrew their inflation-beating Savings Certificates, while the vast majority of savings accounts being offered by banks and building societies offer interest rates below the level of inflation.
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