Fidelity FundsNetwork is offering an Isa for nervous investors reluctant to immediately commit funds to equities or bonds but who still want to make full use of their £7,000 tax allowance.
The Isa Cash Park will be made available in mid March and will pay interest monthly at a gross annual rate of 4.85 per cent (AER 4.96 per cent).
Investors will have to intend to place their money into equity or bond funds on the FundsNetwork platform but can temporarily place their full Maxi allowance of £7,000 in a cash deposit – making use of the Isa tax allowance.
Fidelity FundsNetwork head David Dalton-Brown 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.”
FundsNetwork says the investment will be held by the Royal Bank of Scotland.
It says the minimum contribution will be £1,000. Interest is to be paid monthly.