Ordinary Account

An account where you can pay in and withdraw up to £100 in cash on demand at any post office. From 29 January 2004 no new accounts will be opened and existing holders will be asked if they want to transfer elsewhere. From 31 July all existing accounts will be closed.

Who can invest Anyone. Accounts can be held jointly.

How worthwhile Poor value. An alternative to a bank current account for people on low pay or pensions who live in rural areas without access to a cash dispenser. The limited tax exemption is not worth having. Compare with Bank and Building Society Instant Access Account. Consider for more convenience and better interest Bank and Building Society Cash Card Account.

Minimum £10 each time you make a deposit (£500 to get higher interest).

Maximum £10,000 plus accumulated interest.

Suitable Lump sums. Regular savings.

Money back On demand up to £100. If over £100, your bank book is usually sent to NSB headquarters unless you have a 'regular customer account' at a designated post office which you have use regularly for at least 6 months, in which case the limit is £250. One withdrawal per day is allowed. Withdrawals over £100 (£250 if you deal regularly with one post office) must be in writing. Ask for a repayment form and post-paid envelope at a post office.

Interest From 1 July 2004: 0.95% a year interest for each calendar month, e.g. 1 to 30 April inclusive, on balances of £500 or more provided the account is kept open for the full calendar year; all other balances receive 0.85% a year. No interest on a deposit or withdrawal during the calendar month in which it is made.

Interest paid Yearly added to account on 31 December.

Tax Not deducted. The first £70 of interest on capital held for the whole of 2000 will be tax-free. If husband and wife have a joint account, £140 is tax-free. The tax-free limit applies to the total of all NSB Ordinary Accounts you have. Taxpayers are liable to pay income tax at 10%, 20% or 40% on the excess over the tax free amount; all interest should be declared on a tax return.

Fees to pay None.

Passbook Yes, called a bank book.

Children Suitable. Under 7 a relative or friend can open an account in a child's name where withdrawals may be made by the child's parent or guardian. At age 7 the child can withdraw on his or her own signature.

Risk None. Full value of original investment returned on withdrawal.

How to invest Not applicable.

Where from Not aplicable.

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Last updated 24 June 2004