National Savings and Investments is withdrawing its cash Isa, which has a minimum opening deposit of just £10, from new customers.
Existing cash Isa customers will no longer be able to make deposits at Post Offices or by bank giro credit but will be able to operate their accounts by phone, post, electronic transfer or by standing order.
The Government-backed provider said the change would come into effect from April 6 2009 as part of its five-year ‘simplification and modernisation’ strategy to reduce product duplication, although it does mean another service will be withdrawn from post offices.
National Savings and Investments (NS&I) said to support the changes to the cash Isa, it was making its direct Isa – available by telephone or internet only – more accessible.
From February 1 2009, the minimum initial investment has dropped to £100 from £1,000 and the minimum withdrawal is now £50, reduced from £250.
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Peter Cornish, NS&I’s director of customer offer, said: ‘We’ve been looking at ways to simplify our product range for some time.
‘Although the cash Isa will be closed to new sales, existing cash Isa customers will still be able to make deposits by telephone, post, standing order or electronic funds transfer.
‘In addition there will be no changes to the way they are able to withdraw money from their accounts.’
NS&I said its direct Isa, launched three years ago, had attracted 65% more customers than the cash Isa, launched in 1999.
Mr Cornish said NS&I would write to all of its cash Isa customers to explain the changes before they were implemented.
He added: ‘We still have a wide range of savings products available through the Post Office and existing customers who still want to invest with NS&I over the counter will continue to have a choice in a wide range of investments.’