Widows e-cash

ISA SCOTTISH WIDOWS BANK Type: E-Cash Isa and Direct Transfer Account

Description: Scottish Widows Bank has raised the bonus by 25 basis points on its e-Cash Isa savings account and its Direct Transfer Account to 1.5 per cent.

The bonus on the Isa will be paid for the first 12 months while the bonus on the Direct Transfer Account will run for six months.

The Isa pays variable interest pegged to Scottish Widows' base rate which is currently at 4.5 per cent and translating into an annual rate of 6 per cent. The rate on the Isa is guaranteed to be no more than 0.25 percentage points below its base rate until 31 December 2012.

The Direct Transfer Account is available through IFAs only, upon which introducers will be paid a 0.2 per cent annual commission. Scottish Widows promises not to cross-sell products to these customers.

Conditions: The Isa is accessed by the internet only. Investments begin at £10 and are limited to £3600 a year, and there are no notice periods or penalties for withdrawals. Interest paid is tax free to qualified savers. The bank is not bound to keep its base rates at parity with the Bank of England's but historically it has done so. Base rates are adjusted on the first of each month following any changes to Bank of England rates.

Verdict: This is a standard offer that may appeal most to the average investor. As an economic recession looms, market pundits have their money on the Bank of England cutting base rates by a further 0.5 of a percentage point. Commission on the Direct Transfer Account will come as a bonus to IFAs who do not typically enjoy commissions for deposit-type products. A modest incentive but it could go some way in encouraging advisers to consider this as part of their clients’ overall portfolio.

Contact: www.scottishwidows.co.uk

Rating: 3/5 stars