Stand up if you hate Man U's mini cash ISA

Melanie Bien
Sunday 29 August 2004 00:00 BST
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Although football clubs often capitalise on the passion of their fans by persuading them to invest in personal finance products, these deals are rarely the most competitive.

Fans would be better off putting their loyalties to one side and ruthlessly scouring the market for the best deal instead.

Manchester United leads the way when it comes to offering club-branded finance products. Last week it added a mini cash individual savings account (ISA) to its range, which covers the entire financial gamut from mortgages to personal loans, credit cards and insurance.

But, just like the team's performance last season, Manchester United's ISA won't be topping the table - our "best buy" table, that is. Interest is paid at 4.25 per cent, well below the rate offered by the best buys on the market: Abbey and Intelligent Finance (5.1 per cent), Halifax (4.9 per cent), Kent Reliance building society (4.85 per cent), Direct Line (4.7 per cent) and Nationwide and Norwich & Peterborough (4.65 per cent).

The MU Finance cash ISA does come with a guarantee, which means the provider (Britannia building society) can't change the rate at a whim. But it guarantees only that it won't fall lower than 2 per cent below the Bank of England base rate (currently 4.75 per cent). By comparison, IF's mini cash ISA is guaranteed to stay at least 0.3 per cent above the base rate until January. Even with its protected rate, MU Finance could get away with paying its ISA customers an extremely low 2.75 per cent interest.

MU Finance makes a big deal of the fact that its ISA "applies no account charges, no penalties for withdrawal and no tax!" But there's nothing unusual in that - the same is true of pretty much any other mini cash ISA.

The one quirk of the products offered by MU Finance is that the rate which Manchester United fans get is directly connected to the team's performance on the pitch. This is referred to as the "you win, we win" performance trigger.

But the team ended last season with just the FA Cup for comfort, so if fans are relying on their future performance for a decent return on their investments, they could be disappointed. Manchester United face a tall order, too - winning the Champions League this season - before savers benefit by receiving a £100 holiday discount voucher (which will be no benefit at all if you aren't planning on going on holiday).

There are better mini cash ISAs out there, and Manchester United fans would be wise to shop around for one.

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