A new alloy composed of 79.4% Ni, 16.6% Fe, 3.0% Nb, and 1.0% Ag has been developed for use in magnetic memory elements. After heat treatment the material in flattened‐wire form (0.003×0.00025 in.) has a rectangular hysteresis loop with a squareness ratio of 0.95, a coercive force of 1 Oe, and a switching coefficient of 0.3 Oe‐&mgr;sec. In basic Ni3Fe alloys, uniaxial magnetic anisotropy as well as increase in coercive force result from cold working. Normally, the anisotropy is destroyed by the anneal required to lower the coercive force. Retention of magnetic anisotropy has been achieved by the addition of Nb and Ag to the basic alloy. This behavior is attributed to the presence of dislocations anchored in the slip planes. These dislocations are believed to result from the interaction between lattice strains arising from the oversize foreign atoms (Nb and Ag) and strains generated by plastic deformation.