Kaupthing Edge Savings Rate Frozen For Now

sho_me_da_money wrote: »

Its good if you have no ISA to go into but after the interest is taxed, an ISA works out better!

Hopefully they will launch a table topping ISA ready for new ISA year with minimum investment of 3600.

Primrose wrote: »

I think this will depend on whether Kaufthing introduce an ISA in the first place, and whether they will accept transfers in from other institutions. I imagine that with such a competitive interest rate they could quickly attract a lot of new business and there will be hiccups trying to open an account initially, just as ICESAVE suffered in the early days. Haven't investigated this bank yet. Is it going to be a internet service only?

Yip is internet only, personally whichever institution people decide to save with, each higher rate account launched means higher rates overall. :j

Better to see higher rate accounts being launched than lower rates.;)

This is how the last few days have unfolded.



An Icelandic bank, Kaupthing, this week sparked a price war with the launch of a new account paying 6.5%.


The Guardian, Saturday February 2 2008

If the recent turmoil in equity markets has been bad news for those with a big shares portfolio, it has been heaven-sent for savers. Following a rush of new accounts on to the market this week, it is now possible to open an easy-access savings account paying 6.5%.

Fixed-rate bonds are paying closer to 7% - and there are a few tax free Isas paying more than 6%.

With banks desperate to get money in and stockmarkets drooping, the savings rates on offer are now so good many people think they are the best home for your cash.

Instant access
Last year an Icelandic bank, Landsbanki, took the savings market by storm with its IceSave account.

This week another relatively unknown Icelandic bank, Kaupthing, joined the battle for the UK's savings with a new account paying a table-topping rate of 6.31% gross (6.5% AER).

But such is the level of competition within the market that just hours later West Bromwich Building Society unveiled a new instant access account paying an even higher rate - 6.55% for annual interest payments. Then Abbey upped the rate on its eSaver Direct account by 0.5% to 6.5%, available from Monday. But the rate includes a 0.5% bonus which drops out after 12 months.

The Kaupthing Edge (kaupthingedge.co.uk) account is available to customers from today and guarantees to be at least 0.3% above base rate until February 2012. It can only be opened online, with a minimum investment of £1,000 and a maximum of £1m.

However, West Brom's Star Easy Access account pays slightly more and is also available now - the main difference is that it pays 6.36% if the interest is paid monthly. You only need £1 to open an account - the rate is guaranteed to be at least base rate plus 0.5% for at least the next 12 months. The account is available via its branches, post, phone or internet.

Cash Isas
For anyone new to saving, and who still hasn't got a cash Isa, sign up for one now as this is the easiest financial decision you'll ever make.

Cash Isas allow you to save up to £3,000 a year (£3,600 after April 6) tax free - no tax is deducted from the interest rate paid.

The top rate in the market at the moment is offered by Scarborough Building Society. It is currently paying 6.3% although you have to have a minimum of £1,000 and be prepared to give 90 days' notice of any withdrawals. You are allowed to transfer in Isa balances with other banks. A spokeswoman says the building society is committed to keeping the rate "competitive" over the coming months.

Perhaps the better bet, given that interest rates look set to fall, are Bradford & Bingley's and Northern Rock's one-year, fixed-rate Isas both paying 6.2%. B&B wants a minimum £1,000 and you have to lock your money away for a year. The offer is only available from branches until they close today.

Again, Northern Rock is also offering a one-year fixed Isa paying 6.2%, which should be around for some time - the minimum deposit is £500.

Moneyfacts says consumers can expect to see new Isa products start to appear as we get closer to the start of new tax year.

Fixed rates
Kaupthing has not only shot to near the top of the easy access list, it is also offering the second highest paying fixed rate bond.

Kaupthing's one-year fixed-rate account pays 6.86%. It also has a six-month bond paying 6.69%.


One other account launched this week that has to be mentioned is Norwich & Peterborough's Family Regular Saver account paying a table-topping 8%. Investors get the 8% rate if they agree to pay in between £1 and £250 a month and make a maximum of one withdrawal a year.

That rate is fixed for 12 months - one account is allowed per person. N&P is also offering a five-year family fixed rate bond paying 5.5%.

Security
Since the Northern Rock debacle the government has announced that all savings up to £35,000 are covered under the Financial Services Compensation Scheme. If you have a greater sum to invest, spread your savings between institutions.
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