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It's still worth a flirt with TESSA.

IF you haven't started a TESSA, now's a good time. These Tax-Exempt Special Savings Accounts are available until April 1999 when they'll be replaced by the new Individual Savings Accounts (ISAs).

After that you can't start a new one but existing TESSAs will be allowed to run their five-year course.

All the interest earned on TESSAs is tax-free on capital that stays in the account for five years.

Legal & General have just launched one paying a variable 7.9 per cent on balances of pounds 3,000 - the most you can put into a TESSA in its first year - and 7.4 per cent on lower sums.

The minimum input is pounds 1,000. The most you can salt away in any TESSA in stages over its five-year life is pounds 9,000.

If you've got pounds 9,000, you can put pounds 3,000 into L&G's TESSA and the rest into a feeder account, which pays a taxable 7.9 per cent.

The rest will be transferred annually into your tax-free TESSA.
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Title Annotation:Features
Author:Gunn, Cathy
Publication:The People (London, England)
Date:Feb 1, 1998
Words:174
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