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www.InvestmentGuide.co.uk Other Bank and Building Society Accounts
BANK or BUILDING SOCIETY
(Also called Tax Exempt Special Savings Account)
These accounts are no longer available. They can be transferred to a TESSA only ISA Check up from time to time that the interest rate remains competitive. If it isn't, transfer to a better Tessa Account at another bank or at a building society. Don't transfer if the Tessa is your only account with a building society which has not yet converted to a bank or you will lose the possibility of a windfall gain. Similarly, if you make a transfer, why not choose a society which has not yet converted to a bank.
Who can invest No new investment allowed.
How worthwhile Good value for taxpayers, especially higher rate taxpayers.
Minimum Not applicable.
Maximum The amount already invested.
Suitable Existing lump sums.
Money back You may lose bonuses on early closure or transfer.
Interest Usually variable. Some offer fixed rates for all or part of the term.
Interest paid Usually added to account yearly. Part of the interest can usually be paid to another bank account or by cheque to you. But the amount of interest equivalent to 20% rate of tax which would be deducted on a normal account must be accumulated for the full 5 years.
Tax Interest is tax free. It does not have to be included on a tax return.
Fees to pay Most have charges, e.g. £20, £25, £50 if you want to move the account to another bank or building society, should their interest rate become poor value. With others you can avoid the charge by giving 7, 28 or 90 days notice.
Passbook Statements usually sent.
Children Not eligible.
Risk 100% compensation scheme on the first £50,000 since 7 October 2008 for each investor in each licensed bank or building society under the investors compensation scheme if the institution goes bust.
How to invest You can now only transfer an existing TESSA.
Where from Not applicable, see TESSA only ISA.
Other Bank and Building Society Accounts
Last updated 1
December 2008.