Views on Abbey's Super ISA?

JHB_2

I gather this is a plan whereby you can save from £500 upwards and get 8% as an ISA and you have to put an equal amount into a Guaranteed Growth Plan.

The ISA reverts to a Direct ISA on 1 May 2008, but the other half of the money invested in the Guaranteed Growth Plan gets a guaranteed minimum return of 9% over a 3 year term or 23% over a 5.5 year term. I was told by the branch I called into that the Growth Plan rate is averaging out to approximately 35% at the moment. It seems an attractive proposition to me and is quite tempting, but just wondered if there is anything I've missed and is it as good a deal as it seems?

SeanW

The guaranteed Growth plan alone is an appalling product when compared to its peers, as others are currently offering 110% of growth in the index.

Obviously when compared with the ISA, you are getting a better rate at 8% on the cash in the first year, but depending on FTSE performance that might not be beneficial.

And if it is really averaging at 35% now over 5.5 years, that is 5.6% a year on the growth plan part of the cash. But 35% now could be 0% in 5.5 years, it could also be 1000% who knows.

masonic

Well, for one thing 9% over a 3 year term amounts to 2.9% per year and 23% over a 5.5 year term amounts to 3.8% per year.

clare_r21

Yeah,I've been very tempted by the AbbbeySuper Isa too...thanks for pointing out the downside,so i guess the investment bit even for 3 years(the min),is not great and there are better places to put the money?
I guess it's the Barclays for me..any thoughts?

masonic

The choice seems to be Barclays or NS&I, depending on whether you think NS&I are likely to keep their rates competitive beyond year 1 (Barclays surely won't).

JHB_2

Thanks to SeanW and Masonic. Clearly not such a good deal. I guess 23% or the possibility of higher sounded good, but yes, when considering the years involved, it's not so good. Thanks for that.

Who is currently offering 110%?