Check the financial pages of the papers for the best rates for mini cash ISA's you will notice that many banks and Building Societies come and go as they raise their rates only to drop them again once you have opened the account.
Kent Reliance is however consistently near the top of the list over the longer term.
This building society can trace its history back over 150 years and has over £1.5 billion of assets.
My wife opened the Direct variable rate mini cash ISA at the time of writing this postal account pays 5.96%. You can download an application form from the website or request one by phone.
Cheques can simply be sent in the post and a receipt is sent back and if you need money you can access easily by postal request.
Under ISA rules you can invest up to £3000 per tax year and you can open the account with just £1.
Anyone opening a Building Society account in the last few years will know that you usually have to sign a charity clause so that if they merge or demutualise for typically five years after you become a member,you sign away your money to charity but Kent Reliance have dropped this clause to encourage more people to join.
I am a confirmed rate tart! I have no loyalty to any financial institutions and no one can count on my business. I regularly look at the interest rates I am getting on my savings. At the beginning of May a friend told me that she had just transferred her ISA to the Kent Reliance building society, as they were offering a really good rate of interest. I had never heard of this building society before so went of to google them.
Their web site is really clear with lots of useful information. I found that they were offering a direct mini cash ISA paying 5.96%. I was also happy to read that they would allow me to transfer my existing mini cash ISA to them held with another provider. Many providers such as Ing pay a higher rate but dont allow you to transfer your existing ISA so are great for new ISA savers but not good if you have been building up your tax free savings for a few years. The Kent Reliance does not allow you to transfer in a maxi ISA.
As you are probably aware there are 2 types of ISA (individual savings account) the maxi ISA and the mini cash ISA. With a maxi ISA you can invest £3000 in cash and £4000 in stocks and shares in any tax year. If you choose a maxi ISA then all your investment has to be with the same provider. With a mini ISA you can invest £3000 in cash and £4000 in stocks and shares in any tax year. With a mini ISA you can have your cash with one provider and your share element up to £7000 with a different provider.
The Kent Reliance building society only offers a direct mini cash ISA. The account can only be operated by post via their head office in Chatham. This is a bit more time consuming than having an Internet account but with the current interest rate I am not complaining!
In order to have a mini cash ISA you need to be 16 years old and a resident of the U.K. It is not possible to have an ISA in joint names. You can only invest £3000 into your cash ISA in any tax year.
Opening a mini cash ISA.
. It is possible to down load an application form on line simply go to the web site at www.krbs.co.uk, or if you prefer you can telephone their head office in Chatham (01634-848944) and request an application form. I decided to phone and requested an additional form to transfer in my existing cash ISA. I was told this could take up to 30 days.
A few days later the form arrived including a section asking for details of my existing provider. A word of caution-if you want to change providers and you have an existing ISA, dont withdraw your money from previous years as you will not be able to pay it back into your new ISA and it will loose its tax-free benefits. If your new provider allows transfers in then they will request your old ISA funds are transferred to them on your behalf.
The form itself was very simple .It was explained that if any further information was required to prove my identity then I would be contacted. I posted my forms back by first class post together with my cheque for £3000 and waited for an acknowledgement. Ten days passed and I had heard nothing so I decided to phone to check all was well. I was irritated to be kept waiting for nearly 20 minutes before it was confirmed that my application form had been received and I was given my account number. A few days later I received a letter of confirmation that my account was opened and the funds had been requested from my previous provider. However there was no mention of my cheque! I telephoned again and again had a long wait. I was told my cheque had not been received but could be still in their post room. I was told that they were very busy but that I would be called back when and if my cheque was located. I was eventually phoned and told my cheque had been founds and would now be processed. I am still waiting for a receipt 3 weeks later!
I was a bit surprised that I was not asked to provide a password or given any other security to use should I wish to speak to someone on the phone about my account.
As I have said this is a postal account and has to be operated via the Kent Reliance head office in Chatham. Paying money into your account is simple, just write a cheque payable to yourself and post it to head office. In theory you should receive a receipt within a few days, although in practice it was not that simple! Stationary including paying in slips and withdrawal forms will be sent to you with your quarterly statements. Statements are sent in January, April, July and October. You can also down load stationary from their web site.
Withdrawals are instant and without penalty. Should you wish to withdraw your money you will need to send in a request via the stationary provided. A cheque will then be sent payable to the account holder.
Interest will be added to the account in April. This is a variable rate account and interest rates can change either up or down. At the moment this account is paying 5.96%. Should this rate no longer be competitive then it is worth knowing that you can transfer to another provider without penalty.
A bit about the Kent Reliance building society.
The first thing to note is that the Kent Reliance is a building society and is operated for the benefit of its members and not its share holders, a real positive as far as Im concerned. They are the only building society based in Kent and have been in existence for over 150 years. With branches throughout Kent and assets of over 1.5 billion, the Kent Reliance is the fastest growing building society in the U.K and has been for the past 3-years. In addition to their direct mini cash ISA they offer mortgages and a variety of savings accounts, although most of the savings accounts I looked at had poor rates of interest.
If you are worried about the safety of your funds you can be reassured that the Kent Reliance is a member of the financial compensation scheme, so if it all went horribly wrong then you would be compensated up to £31,700.As this is a postal ISA internet surety is not an issue although I am assured by the building society that their web site is very secure.
As I have already indicated the customer service element leaves a lot to be desired. I would have expected to receive some sort of welcome pack including some stationary. However all I received was a short letter and even that did not give me my account number! The call waiting times are unacceptable as is the time it takes to process incoming funds.
The Kent Reliance is offering a very competitive Mini cash ISA rate and I wonder if they have been caught out by the number of applicants for this account?
If you are looking to open a new ISA or are an existing ISA saver unhappy with your current rate then I would recommend the Kent Reliance. I just hope they can improve their customer service!
Every year each individual in the UK has a certain amount of money which they are entitled to put into an ISA. An ISA is essentially a tax-free wrapper; that is any income or capital gains will not have to be explained to Mr Brown. Within the tax year a maximum of £7000 may be saved by an individual in a mixture of cash, stocks and shares. The smaller saver will probably look into the cash alternative first and foremost where you can save a maximum of £3000 each tax year. If you want more information on the different forms of ISA in order to see which combination may be suitable for you there are many websites around that explain them quite clearly and concisely. Simply do a google search and you should find many helpful pages.
To open an ISA you must be over 18 years of age, although from the age of 16 you are able to open a Mini cash ISA or just the cash component of a Maxi ISA. As the main benefit of an ISA is its tax exemption you must be a UK resident. ISAs can never be held as joint accounts or even on behalf of somebody else. Something to bear in mind too is the fact that even though you are entitled to withdraw your money during the tax year, this will still count towards your entitlement. That is, if you have saved £3000 in the year and withdraw £100 you will then NOT be able to put that £100 back into your ISA.
I decided to open an ISA as I thought it was about time for me to try to save a little bit of money rather than just spending it all as soon as I got it. As a regular visitor to the moneysavingsexpert website I decided to see what he recommended. Kent Reliance Building Societys (let me call it KRBS from now on, thats just way too long!) Mini Cash ISA was one of the ISAs that he recommended. The other two required a minimum opening deposit of £1000 and as I said I havent exactly been saving money so I couldnt afford this. However KRBS offered a Direct Variable Rate Mini Cash ISA at 4.96 AER with a minimum opening deposit of just £1. In case youre not too sure about what AER means it is the annual equivalent rate. That is what the interest rate would be if it was paid and added each year - making it easier to compare financial products. Interest is added annually on the 5th of April each year and is, as with all ISAs free of any income of capital gains tax.
I printed off a form from their website (http://www.krbs.co.uk/directisa.aspx) and sent it straight off to them together with a cheque made out in my own name. Within a week they sent me a letter to ask for proof of name and proof of address. This I think have to do with the fact that Im not English and have only lived at my current address for about 4 years. As I couldnt provide any of the documents required to prove my name I sent them an email to ask whether my Swedish drivers license would be acceptable. The email I got back asked me to send a copy of my passport instead but as it was stuck at the embassy at that point and I wanted to get my account up and going I emailed them back and told them that I only had my drivers license available. The day after they got back to me and told me this would be acceptable. In all it only took about a week to get it all up and running and I think that is quite acceptable.
The account is not online (unfortunately, I would have preferred that). To deposit money you can either set up a standing order or simply send a cheque made out in your own name and quote your account number on the back. So far I have opted for sending cheques as I dont feel as bound by it then. There is a freepost address to send the cheques to, unfortunately it took me a couple of times to realise this as it is not exactly advertised in bold letters so I ended up having to pay for the stamps! Oh well, we live and learn.
You can withdraw money at any time without any notice or penalty but you will need to use the withdrawal slip that is sent out to you when you open the account (you can also download them from the website). The money may then be paid to you via cheque, or if you provide your bank details, straight into your bank account. Bear in mind this process is not immediate so you may have to wait 3-4 days before you have your money safely in your bank account.
My experience with this ISA has only been good so far. I have not withdrawn any money yet, but sent several cheques. In general it takes about 5 working days for the cheques to clear. You will get a receipt sent out with each deposit you make, provided its not a standing order. Statements are sent quarterly in January, April, July and October. The annual statement in April will also show you the amount of interest earned during the tax year.
Since I opened my ISA the interest rate has gone up from 4.96% to 5.21%, and it seems likely that this will go up again depending on whether the Bank of England raise the base rate again. I have received plenty of correspondence with regards to my account but not yet any sort of junk trying to convince me to take out loans or insurances with KRBS something I truly appreciate; I get enough as it is. Although it is possible to contact them via the phone I have handled any queries I have had with them online and this has proved very efficient.
I would certainly recommend this ISA for anybody who wants to start saving but dont have the money many other ISA providers require. The interest rate is one of the highest in the market and so far they have proved very efficient and helpful.