Fixed Rate ISA

Don't need instant access to you money? A Fixed Rate ISA could be right for you.

Fixed Rate ISAs are savings accounts that pay you a fixed rate of interest for a fixed number of years. They’re designed for savings that you can afford to put away for the full fixed rate term.

Fixed Rate ISAs offer:

• Fixed rates of interest - you'll know in advance what your tax free savings will earn
• A range of terms – with NatWest you can save for one or two years
• Competitive interest rates - rates for fixed term ISAs are generally better than the rates you’ll find with instant access accounts

Withdrawals are not allowed

If you need access to your savings you can close your Fixed Rate ISA but you will incur an interest charge equivalent to:

90 days gross interest (1 year Fixed Rate ISA)
180 days gross interest (2 year Fixed Rate ISA)

If the amount of interest charged is more than the interest accrued on the Fixed Rate ISA at the date of closure, this will be deducted from the rest of your account balance. This would mean the amount would be deducted from the capital sum invested. In this situation the closing payment would be less than the amount of money you originally invested in the Fixed Rate ISA account.

Common Definitions

Annual Equivalent Rate (AER) is a notional rate used for interest bearing accounts, which illustrates the interest rate if paid and compounded each year. It helps you to compare the effective rates of credit interest on different accounts.
Gross means the interest rate you are paid before the deduction of income tax.

If you want to take advantage of this Fixed Rate ISA you must open your account no later than - 20th May 2013.

Interest paid before the start date

Interest will be paid at the rate of 1.50% AER/Gross (fixed) p.a. until the Fixed Rate ISA start date - 10th June 2013.

Annual interest

We calculate this daily and pay it into your Fixed Rate ISA on the last business day in March.

Tax year subscriptions

You can’t subscribe to another cash ISA in the same tax year in which you opened the Fixed Rate ISA. A Fixed Rate ISA is a type of cash ISA.

Top ups

You have between 16th April to 03rd June to use your 2013/2014 cash ISA allowance to top up your Fixed Rate ISA before the start date. Ensure funds are cleared and in the account by these dates. No additional deposits are allowed after 03rd June 2013.

Your 2013/2014 cash ISA allowance can be used by crediting funds or if you have already used your 2013/2014 allowance in another cash ISA, by transferring this cash ISA. Remember you can only pay into one cash ISA in each tax year but funds can be transferred from previous years’ cash ISA subscriptions.

If you make a subscription but do not invest the full ISA subscription limit for a tax year into the Fixed Rate ISA, you will not be able to make further subscriptions for that tax year into any other cash ISA.

Withdrawals are not allowed

If you need access to your savings you can close your Fixed Rate ISA but you will incur an interest charge equivalent to:

• 90 days gross interest (1 year Fixed Rate ISA)
• 180 days gross interest (2 year Fixed Rate ISA)

If the amount of interest charged is more than the interest accrued on the Fixed Rate ISA at the date of closure, this will be deducted from the rest of your account balance. This would mean the amount would be deducted from the capital sum invested. In this situation the closing payment would be less than the amount of money you originally invested in the Fixed Rate ISA account.

At the end of the fixed term

On maturity your Fixed Rate ISA account will automatically convert into a standard cash ISA. You can:

• Reinvest into a new Fixed Rate ISA (subject to availability) and add new funds if appropriate
• Leave your money in the standard cash ISA

• Are there any penalties if I withdraw money before the end of the term?
• Can I transfer in cash ISAs from other providers?
• I’ve paid £1,000 of my current tax year allowance into a cash ISA with another provider. Can I open an NatWest Fixed rate ISA and pay in the remaining £4,760?
• Do I need to send a cheque for my initial deposit and who should I make it payable to?
• I’m registered with Online banking, how do I check what my cash ISA limit is?

Q. Are there any penalties if I withdraw money before the end of the term?

A. Yes. Withdrawals are not allowed but if you need access to your savings you can close your Fixed Rate ISA and incur an interest charge. More on interest charges

Q. Can I transfer in cash ISAs from other providers?

A. Yes. You can transfer cash ISAs from other providers and/or combine cash ISAs held with us. You can find details here.

Q. I’ve paid £1,000 of my current tax year allowance into a cash ISA with another provider. Can I open a NatWest cash ISA and pay in the remaining £4,760?

A. You can’t pay into more than one cash ISA in the current tax year. However, in this case you can transfer the other provider’s cash ISA into a NatWest cash ISA.

As it is a current tax year ISA, you’ll only have the option of transferring the whole balance to NatWest, i.e. £1,000 in this example. Then, you can top-up your new NatWest cash ISA by £4,760 to £5,760.

Q. Do I need to send a cheque for my initial deposit and who should I make it payable to?

A. No, once your account has been opened we’ll write to you with instructions on how to make a deposit.

Q. I’m registered with Online Banking, how do I check what my cash ISA limit is?

A. If you’ve not used any of your cash ISA allowance for the tax year, it will show the 'Deposits allowed this year'. If you have used some, but not all, of your allowance, it will show the 'Deposits allowed this year' and 'Deposits so far this year'.

If you have used all of your cash ISA allowance for the tax year, it will show the 'Deposits so far this year'.

An ISA is a tax efficient way to save. It stands for Individual Savings Account. With an ISA you pay little or no tax on the interest your savings and investments make.

There are two types of ISA:

• Cash ISAs — are tax-free. Interest payable is exempt from UK income tax. NatWest Fixed Rate ISA is a type of cash ISA.
• Stocks and shares ISAs - are tax efficient. They are a medium to long term investment so they should be held for at least five years. With stocks and shares ISAs, the value of your investment and any income you receive can go down as well as up and you may not get back your original investment.

Paying money into an ISA is called a subscription. You can subscribe to one cash ISA and one stocks and shares ISA in every tax year, and there’s a maximum amount you can pay into each one.

With some cash ISAs, you have instant access to your money. With others you'll pay an interest charge if you withdraw your money before the end of the term.

It’s important to remember that ISA allowance limits apply to everyone on an individual basis. If you’re married or in a relationship, you can both have an ISA, each with the full allowance.

To subscribe to an ISA:

• You must be aged 16 or over, or 18 or over to hold a stocks and shares ISA
• You must be a resident and ordinarily resident in the UK
• You can subscribe to one cash ISA and one stocks and shares ISA in a tax year, but there are limits to how much you can save in each ISA.

There’s a yearly limit on the amount you can put in to an ISA. For the 2012/13 tax year the limit is £11,280. You can use this allowance in a variety of ways. You can:

Save up to £5,640 in a cash ISA
or
Save up to £11,280 in a stocks and shares ISA
or
Save up to £5,640 in a cash ISA and put the remainder of the £11,280 allowance into a stocks and shares ISA

If you put less than the full allowance into a cash ISA, you can use the rest of that limit to add into your stocks and shares ISA limit. For example, if you only choose to put £2,000 into a NatWest Fixed Rate ISA, you can put up to £9,280 into a stocks and shares ISA.

If you withdraw money from your ISA, you cannot reinvest it in the same tax year if your total deposits will exceed your yearly allowance. Partial withdrawals from a NatWest Fixed Rate ISA are not allowed. Early closure will result in an interest charge.

There are two types of cash ISA:

• Variable Rate ISAs – where the interest rate can move up and down. They normally give you instant access to your money or a short notice period.
• Fixed Rate ISAs - where the interest rate is fixed for a period of time, and conditions often apply if you want to withdraw your money early

Your choice of stocks and shares ISA

You can choose from three types of stocks and shares ISA:

• Self-Select ISAs, where you choose what you want to invest in
• Actively Managed ISAs, where a team of experts manage your investments for you
• Passively Managed ISAs, (also known as tracker ISAs) where your money is invested so that it tracks a particular market or index, such as the FTSE 100.

With stocks and shares ISAs, the value of your investment and any income you may receive can go down as well as up and you may not get back your original investment.

When a Fixed Rate ISA matures

Upon maturity your Fixed Rate ISA account will automatically convert into a standard cash ISA.

Upon maturity you can:

• Reinvest into a new Fixed Rate ISA (subject to availability) and add new funds if appropriate
• Leave funds in the cash ISA

Making future subscriptions

You can subscribe to a fixed rate cash ISA for a single tax year, but it can be fixed for a longer term, sometimes up to five years. In the next tax year, you can then open a new cash ISA which can either be fixed rate or variable rate.

You can keep a variable rate cash ISA and a stocks and shares ISA open year after year, paying into them in subsequent tax-years, up to your yearly allowance. However, if an entire tax-year goes by without a deposit being made into your cash ISA, you cannot make any further payments into it until you have reactivated your account.

How to reactivate your cash ISA

To reactivate your cash ISA, you simply need to complete a reactivation form.

• Reactivate an old NatWest cash ISA

Transferring an ISA

You can only open one cash and one stocks and shares ISA each tax year. If you want to move your current or previous cash ISA balances between providers, you can, without losing your tax-free entitlement.

Some cash ISA transfers can take up to 15 working days to process. Your new ISA provider will start to pay your interest from day 16 if the transfer process is not complete within this period. This lets you start earning interest from your new cash ISA account faster.

Don't forget to make sure that your new cash ISA provider allows transfers in, and that you open your new account in advance. It is possible to transfer your cash ISA balances into a stocks and shares ISA, however it is not possible to transfer stocks and shares ISA balances into a cash ISA.

There are a number of important factors which need to be considered before transferring a stocks & shares ISA. For more information on stocks & shares ISAs take a look at Tax efficient investments.

If you already subscribe to an ISA in this tax year, in the new tax year, you can either continue to save in your existing ISA, or you can open a new ISA.

You can subscribe to one cash ISA and one stocks and shares ISA in a tax year. Don’t forget, the tax year ends on 5 April – make sure you take advantage of this year’s allowance before it’s too late.

Setting up a new NatWest Fixed Rate ISA is simple and you can apply online. You’ll need the following information to set up a Fixed Rate ISA:

• Your National Insurance number
• One form of evidence of your identity – such as a current passport, full UK driving licence, a benefit book or UK armed forces identity card
• One form of evidence of your address – such as an original gas, electricity, phone or council tax bill, an original bank or building society statement

All documents should be the most recent you have, and no more than six months old.

Apply online for a NatWest Fixed Rate ISA