Halifax offers bigger jackpot chance to ISA savers

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Halifax branch

Halifax has announced a 'super draw' for its ISA savers. Anyone who makes use of their ISA allowance by investing with the company before 1 April this year - and leaving a balance of at least £5,000 in it for the whole of April - will be entered into a draw. Three of them will win £250,000, ten will get £5,000, 100 will win £1,000 and 1,000 will get prizes of £100.

So is this worth a go?



The draw

This is part of a long-running scheme. The draw was launched in December 2011, and every month those who have their money in accounts for the whole of the preceding month are entered into the draw.

Usually it offers 100 prizes of £1,000 and 1,000 prizes of £100. The draw in May will therefore be a 'superdraw', with more higher prizes.

Why?

It's a sign of how hard the banks are having to work in order to encourage people to invest in savings accounts at a time of such low interest rates.

Richard Fearon, Head of Halifax Savings, says: "We launched Savers Prize Draw as a way to encourage customers to achieve their savings goals and making the most of your tax free allowance is a great place to start."

He added: "More people save tax free with Halifax than any other provider, but in the 2011/2012 tax year only 36% of our customers used their full Cash ISA allowance, with millions of people continuing to miss out on the full benefit of tax free saving they're entitled to." The super draw is designed to encourage people to maximise the amount they save - because only those who have invested £5,000 or more are eligible.

The idea clearly works. Since the draw was launched, 1.3 million people have registered to enter. Fearon says: "We know that Savers Prize Draw attracts new savers to Halifax and encourages customers to increase the amount they save."

Should you?

And the good news is that some of the range offers good rates. Yesterday the bank increased its rates on a number of its ISAs, with the three year ISA saver fixed now offering 3% - which puts it at the top of the best-buy tables for this sort of saving.

Some of its ISAs will clearly not be such great value. The instant access ISA, for example, offers 1.95% - compared to 2.1% with Barclays. It means that it's worth shopping around on comparison sites to check how the bank's offerings compare for the kind of ISA you are after.

If it's competitive, it's well worth considering for your ISA allowance this year - especially with the added bonus of a potential win.

If not, it may be worth investing for a month and then switching to something more competitive afterwards. However, before you do this, you'll need to check that the account you are planning to switch to will accept transfers, or is for new ISA money only.

You'll also need to weigh up whether the outside chance of a win is worth the added bother of switching. It's certainly a longer process, but in an environment when we are struggling to get any decent returns from our cash savings, this is an opportunity for it to net you a windfall - however remote the chances are.

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