London 11 February 2008 – Cautious
Fidelity FundsNetwork™ ISA investors will shortly be able to secure this year’s tax advantages on their full £7,000 ISA allowance without immediately committing the money to equity or bond funds.
FundsNetwork intends to make its
ISA Cash Park, planned to pay interest monthly at a gross annual rate of 4.85% (AER 4.96%)*, available to investors in mid March. The Money will be held by The Royal Bank of Scotland on behalf of FundsNetwork.
David Dalton-Brown, Head of Fidelity FundsNetwork, says: “ISA investors who are nervous about the stock market after January’s turbulence no longer have to defer their investment decision within their ISA and lose this year’s tax breaks. Instead, they will be able to temporarily place their money in cash before the 5 April deadline and then invest into funds at a later date.
“When investors decide the time is right to invest, they can then switch their money from the ISA Cash Park, including interest earned, to any of the 1,100 plus funds from the 60 investment groups on the FundsNetwork platform**.
How the ISA Cash Park works
ISA investors can temporarily place the full Maxi allowance of £7,000, rising to £7,200 from 6 April 2008, in a cash deposit so long as they have an intention to invest the money into equity or bond funds. There is an HM Revenue & Customs charge on interest at source at a flat rate of 20%, so the interest is paid net. Tax-payers face no additional tax charge. Minimum contribution is £1,000. No monthly saving schemes are permitted.
The gross rate of interest is currently planned to be 4.85%, payable monthly (AER 4.96%). The gross rate is pegged at 0.4% below the Bank of England base rate and will rise and fall in line with this. Interest is paid monthly.
FIL Limited and its subsidiary companies serve the major markets of the world by providing investment products and services to individuals and institutional investors outside the US. The FIL Organisation manages a total of £150.9 billion of assets***.
Notes to editors:
* Interest rate will track 0.4% lower than the Bank of England Base Rate. AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.
** Excluding cash funds, which are not eligible for the Stocks and Shares Component of an ISA.
*** Source: Fidelity as at 31.12.07
FundsNetwork, Fidelity’s fund platform, was launched in June 2000. It offers advisers and their clients the ability to invest, manage and monitor their investments in one place, bringing them control, efficiency and new business opportunities. The FundsNetwork service is offered and managed by Financial Administration Services Limited. FundsNetworkTM is a trademark of FIL Limited. The Fidelity ISA is offered and managed by Financial Administration Services Limited. The value of tax savings and eligibility to invest in an ISA will depend on individual circumstances and all tax rules may change in the future. Any opinions expressed are made at the time of writing and can be subject to change without notification. The value of investments and the income from them can go down as well as up and an investor may not get back the original amount invested. Investors should also note that the views expressed may no longer be current and may have already been acted upon by Fidelity. Assets as at 31.12.07 are those of FIL Limited.
