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Alliance & Leicester 10% Premier ISA ... with a qualifying investment
brawlsadford
Posts: 17 Forumite
has anyone looked into this yet? I've got an appointment with a financial advisor at A&L on Monday to talk about their new 'Premier ISA - Issue 2' - available to existing Premier current account customers opening a qualifying investment with £5000 or more.
It pays 10% AER until June 2009 and transfers in are allowed, "...as long as at least 50% of previous years' transferred funds are invested in a Stocks and Shares ISA."
The qualifying investment appears to be a Credit Suisse fixed-term (six-year) fund, tracking either 'global' or 'emerging' markets. Tax-free minimum growth over six years of 15% is guaranteed; maximum (tax-free) growth is capped at 12.5% per annum. It would appear that the qualifying investment must be funded via 07/08 and 08/09 (cash?) ISA allowances.
I've calculated the return on a 6% cash ISA, compounded over six years to be 142% - is that correct? If so, presumably those emerging markets would have to grow some, and consistently, to beat the return on a 'straight' cash ISA...
I'd welcome comments from MoneySavingExperts on this one so that by Monday I've got my head on straight - forewarned is forearmed!
I'm not averse to risk or overly-exposed to stocks at the moment - just overpaying the mortgage, got a few krugerrands, several year's worth of ISAs and a small stakeholder pension.
It pays 10% AER until June 2009 and transfers in are allowed, "...as long as at least 50% of previous years' transferred funds are invested in a Stocks and Shares ISA."
The qualifying investment appears to be a Credit Suisse fixed-term (six-year) fund, tracking either 'global' or 'emerging' markets. Tax-free minimum growth over six years of 15% is guaranteed; maximum (tax-free) growth is capped at 12.5% per annum. It would appear that the qualifying investment must be funded via 07/08 and 08/09 (cash?) ISA allowances.
I've calculated the return on a 6% cash ISA, compounded over six years to be 142% - is that correct? If so, presumably those emerging markets would have to grow some, and consistently, to beat the return on a 'straight' cash ISA...
I'd welcome comments from MoneySavingExperts on this one so that by Monday I've got my head on straight - forewarned is forearmed!
I'm not averse to risk or overly-exposed to stocks at the moment - just overpaying the mortgage, got a few krugerrands, several year's worth of ISAs and a small stakeholder pension.
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Comments
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If they're forcing you into a guaranteed equity bond to give you this, I'd suggest avoiding the product... Compared with direct investment in decent products and a lower rate cash ISA, you'd probably end up with MORE using the lower rate with the freedom to invest in products you want to invest in.
I've not done the calculations, but I'd suggest avoiding this unless you like the guaranteed equity bond anyway!I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
The are cross subsidising the products. You may gain on the savings account side but you will lose out by having a sub standard investment product. You will lost out by more on the investment side as better options exist there.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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thanks for the responses fellas - think I'll stick with the standard cash ISAs0
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Guys thanks for making very clear what A&L have clearly worked hard to make opaque.0
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