My experience of the National Savings Direct ISA started many years ago when interest rates were much higher than they are today. The National Savings ISA interest rate will drop from 1.75 to 1.5% in February 2014. 1.5% is not too high but when compared with the market the National Savings level is ok. Plus this ISA is backed by the UK Goverment so that the money is as safe as it can be. This is a Cash ISA. I look after it "on line". Although it is possible to manage the account by phone.
What appeals to many is that the lowest investment is just £1 and the most that can be invested in a tax year is £5760. It is possible to add to the ISA in any amount from £1 onwards (up to the max. in a year). The interest like all ISA's is Tax free. There is no notice period for a withdrawal and no penalty.
On the down side there is no bonus paid for new investors.
Depost, withdraw and check account all done on line or by phone.. Unlike the old days the Post Office does not accept deposits or withdrawal - which is a shame.
Each year in April National Savings send out by post a statement with all transactions, although this is quick and very to see on line or ask by phone.
What I like about the National Savings Direct ISA is the ease in which the account can be seen on the NI website. Plus that the ISA can be added too with at such small amounts starting at £1. Plus National Savings is backed by the Goverment so is as safe as can be.
First off, NS is the only Cash ISA backed by a Treasury garantee. I admit, the chances of your capital vanishing in most other Cash ISAs is very, very slim, but if you're planning to keep the cash in your ISA account building up compound interest for years or even decades, it's nice to know that the only way your capital can be at risk is if HM Treasury runs out of money. NS doesn't have the best interest rate out there. It was 6% a few weeks ago, and I think it went down to 5.75% about a week ago, compared with about 6.5% from the best ISA offerers, but it makes up for this in other ways. The first is consistency; NS don't seem to be out to screw their customers, and if you look at their interest rates over a course of years, you realise that they don't suffer the downward creep we've come to expect from the high-street banks. The other is ease of use. I saw an advert accompanied by a form in the newspaper, and it took me less than five minutes to fill it in. If I hadn't had to wander around my room looking for my National Insurance number, it would probably have been less than a minute. Making payments into the account is also easy, you just take your paying in book to a Post Office and you can pay cash or a a cheque straight in. If you want to chase the best interest rates and constantly move your money to realise its full potential, then this account isn't worth a look. If you just want to throw a few hundred quid into an account and don't want to make any other effort, then this account seems perfect.
I have just opened the above account. ISA's and other financial services always seemed a little bit of a minefield, but this account is simple and straightforward to use. A leaflet for the account can be found at Post Offices and explains everything you should want to know in plain English. Its a cash mini ISA, so that means you can save upto £3,000per annum and none of the interest will be subject to income tax. Opening an account is simple, all you need is £10. What has impressed me so much about the account is the many ways that you can pay money into the account-by post, Post Office or over the phone detailing your credit card details. The interest rate is also excellent at 7.87% gross (6.75% net) Well worth your time and effort to investigate this further.