National Counties Building Society (NCBS) will close its tax-free cash Isa which guarantees to beat inflation at 5pm today.
The deadline also applies to existing customers who want to deposit additional cash (see the Inflation-beating savings revived MSE News story).
NCBS says it has been forced to close the account due to an "overwhelming response". When it launched 11 days ago, the society warned that while savers had until 30 September to apply, it would close early if it reached capacity.
The group is the only savings provider to offer consumers an account with an inflation guarantee after the government-backed National Savings and Investments pulled all of its index-linked products last month.
The current combination of high inflation, with RPI at 4.8%, and record low interest rates, at 0.5%, has left savers struggling to make a real return on their money once tax and inflation are taken into account.
How the account works
The five-year Isa, called the 2nd Issue Index Linked Cash Isa, pays annual interest of 1% plus the change in inflation over that period as measured by the Retail Prices Index (RPI).
If you take the account, your money is locked away for the term unless you sacrifice the interest earned from the RPI change.
You must open the account with a minimum £5,100, which is the annual cash Isa allowance (see the Inflation-beating savings revived MSE News story for full account details).
You can deposit cash for the current tax year or transfer Isas from past years. If doing the latter, the process can take weeks but you must instigate the transfer by 5pm and the cash must be in the account by 30 September.
NCBS will continue to accept applications from savers who have received an application pack or applied using its online service "until further notice".
Is the account any good?
Unlike any other savings account on the market it is guaranteed to beat inflation over the term.
Every other standard account fails to beat current RPI inflation, after basic rate tax is deducted. Remember, the present 4.8% rate tracks prices over the previous year whereas anyone opening an account today wants their cash to grow faster than inflation in future years.
Remember, your money is locked in for five years, unless you pay the interest penalty. Also, interest rates may rise in that time and inflation may fall, meaning you'd be better off elsewhere.
Keith Barber, from NCBS, says: "Clearly there is a high level of demand for inflation-beating savings. Customers who have not yet returned their signed application form should do so quickly to avoid potential disappointment."
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