A cash-Isa has been launched by Leeds Building Society this month called the Inflation Buster ISA which promises to beat inflation over the next two years as measured by the Retail Price Index (RPI) and offer an extra 2.25% on your tax-free savings. After the Bank of England’s gloomy assessment for the economy, forecasting inflation may hit 6% before the end of the year, this is one for serious consideration. Although it is technically a two-year fixed-term product, you can access your money after each of the annual interest payment dates without any loss of interest. So it is effectively two one-year products that run consecutively too.
The minimum deposit is £1,000 and it must also be remembered that the two-year term runs from 1 October 2008 to 30 September 2010, so if you invested now you will only receive a rate equivalent to base rate (currently 5%) until October. However this is likely to be a popular product so it may be best to get in there early.
Tags: cash ISA, fixed-term, inflation, ISA, Leeds Building Society