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Five minute finance: Savings

Five minute finance: Savings

Category: Savings

Updated: 30/11/2009
First Published: 19/10/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Just over 12 months ago, savers prepared to lock their money away in a fixed rate bonds were being offered some of the highest rates seen in recent years. Rates moved as high as 7.21 per cent and large numbers of savers took advantage of provider's invitations to lock their money in.

Moneyfacts figures show that at that time, 54 per cent of all savers searching for a new account were after fixed rate bonds, compared to just 21 per cent who were looking for easy access, but one year on the percentage of savers looking for fixed rate bonds has fallen to 34 per cent, while the number looking for easy access has risen to 26 per cent.

Savers appear to have become increasingly knowledgeable about the market and many are no longer driven solely on the rate being offered. Rates on fixed rate bonds remain around two per cent higher than those offered on easy access account, but uncertainty over when the Bank of England will raise interest rates and how quickly means many savers do not want to tie their money up for long periods of time.

New bond from NS&I

National Savings and Investments has just launched a new issue of their Guaranteed Equity Bond, which is available to savers investing between £1,000 and £1m (£2m for joint investments) until 23 November 2009. The account will offer a potential return of up to 50 per cent of the growth of the FTSE 100 Index over the next five years. If no growth is achieved in the FTSE 100 over the term then 100 per cent of the original investment will be returned.

Big bond rates from Ipswich

The Ipswich Building Society has just launched its Big Bond account maturing on 31 October 2014 and paying 5.10 per cent. Savers can invest between £5,000 and £100,000 into the account, with a monthly interest option available to those who invest upwards of £25,000. Further additions can be made into the bond whilst the issue remain open. Access to funds are not permitted until 31st October 2011, after which all withdrawals will be subject to 180 days' loss of interest.

Halifax rewards savers

Halifax has just launched its Guaranteed Saver Reward account paying a fixed rate of 2.50 per cent for 12 months. New or existing customers with a qualifying Halifax current account will receive a fixed rate of 3.00 per cent for 12 months, after which the rate becomes variable. Savers can invest between £2,500 and £9m into the account, which is operated in branch, online, by post or telephone. A cash card is available with the account offering savers instant access to their money, but only four withdrawals are permitted during the first year.

Rachel Thrussell, Principal Consultant - Banking and Economic Insight at commented: "It is good to see Halifax increasing rates on the new issue of the Guaranteed Saver Reward by 0.10% for non current account holders and 0.40% for qualifying current account holders. The added security that the rate is fixed for 12 months, makes both offerings competitive products in the instant access/no notice market."

Gold rush for ISA savers

From today, Buckinghamshire Building Society is rewarding savers who have continually invested their ISA and TESSA allowances. Savers whose ISA balances have reached £50,000 or over are being offered a market leading rate of 3.30 per cent in its Gold Rush 120 Day Cash ISA. If access to funds is required, savers must either give 120 days' notice or lose 120 days' interest for earlier access.

Best buy mortgages from first direct

First direct has this week launched two offset term tracker mortgages currently charging 2.99 per cent for borrowers requiring a 60 per cent LTV deal or 3.44 per cent for those looking for a 75 per cent LTV deal. The new deals are completely fee free with no arrangement, completion, exit, early redemption or standard valuation fees payable, and are available on loans of between £30,000 and £400,000. The flexible deals also include offset and the option of unlimited underpayment.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.