Unit trust tries cash card to lure savers

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The Independent Online
SAVERS with Fidelity Investments' cash unit trust may be offered access to their money through cash machines.

Fidelity is offering cash cards on a trial basis to 2,000 people who have asked for information about the cash trust in the past but not opened accounts. The cards give access to about 12,000 cash machines operated by the Bank of Scotland, Royal Bank of Scotland, Barclays and Lloyds banks and more than 30 other banks and building societies in the Link network.

If the trial is successful, the company may make the card more widely available. At present, only investors who deposit at least pounds 5,000 in the cash fund will be eligible.

Some of those offered the cash card have been asked to pay a one-off charge of pounds 5, while the rest have been offered it free. Fidelity says it wants to see whether people are prepared to pay or not.

Fidelity stresses that the offer is not open to all cash trust savers, as the company's administration is not geared up to deal with a full-scale cash card service.

Fidelity's cash unit trust invests in the wholesale money markets, and its rates move frequently. Last week it was paying 5.3 per cent gross (3.975 per cent net). The minimum investment is pounds 1,000.

The fund obtains high rates of interest through the wholesale money market. At present investors must wait up to three days to withdraw money by post, although cheque books are available to those who have more than pounds 5,000 invested.