Spotlight On: Principality's e-ISA

 

Simon Read
Friday 23 March 2012 21:00 EDT
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The deal

Principality building society has increased the interest rate paid on its e-ISA issue 3 account.

Good points

The cash ISA now pays 3.1 per cent tax free. It can be opened online with just £1. You can stash £5,340 in an ISA before 6 April.

Bad points

It has an introductory bonus of 1.3 per cent for the first 12 months. Once that's expired, the rate falls to a lamentable 1.8 per cent.

Conclusion

Introductory bonuses are ways for savings institutions to trick you into opening accounts that will eventually offer pretty poor returns. Don't be suckered into doing so. Find an account that doesn't shrink interest after a year or so. Of the current best buys, only Marks & Spencer's Money Advantage Cash ISA has no withdrawable bonus. It pays 3 per cent at the moment.

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