Mini Cash ISA's

Most Individuals, with currently modest levels of savings in a bank or building society account, could increase their overall investment return by shopping around for a higher paying interest account. In addition, it usually makes sound financial sense to hold the maximum cash sum eligible in an account which has a Mini Cash ISA 'tax wrapper', which allows the interest to be received tax free.

Based on market rates in November 2004, the following example shows how a typical higher rate taxpayer could switch £3,000 of capital into a mini cash ISA and increase the overall after-tax return by approximately 130%:

The key rules for operating such an ISA are as follows:

• To be eligible, individuals must be resident and ordinarily resident in the UK and over 16 years of age,
• Maximum annual investment of £3,000,
• Once the maximum amount has been subscribed to the account in a tax year, no further subscriptions will be allowed, regardless of how much is withdrawn.

However, it should be remembered that the use of a Mini Cash ISA prevents the purchase of a Maxi ISA during the same tax year and not all Mini Cash ISA accounts meet the Government CAT Standards. Also, Mini Cash ISA's should be viewed as just one component of your wider overall investment scenario and proper professional independent investment advice is recommended to assess your individual needs and opportunities. Our own Financial Advisory Service company would be pleased to offer you this service.

For most taxpaying savers, therefore, with modest levels of capital held as cash, such a CAT Standard account has all the accessibility, capital security and investor protection of a normal savings account, with the added advantage of competitive rates of interest, credited tax free.

Whiting & Partners is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.