- Savers face interest rate drops of up to 7.9 per cent
- moneysupermarket.com urges savers to act now
But for those that invested in one of these deals a new reality awaits, with many rates dropping off significantly when the account reaches maturity (see table below).
|
Expiring 1 Year Bonds |
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|
Provider |
Account |
AER |
AER after Maturity |
Account after Maturity
(Forms will be sent in advance with options) |
|
Bradford & Bingley |
High Life 2-in-1 Saver Issue 2
(Linked Account - Terms & Conditions Apply) |
8.00% |
0.10% |
Standard Maturity Account |
|
Birmingham Midshires |
Internet Fixed Rate Bond |
7.17% |
2.50% |
Internet Access Reward Account |
|
FirstSave
Part of First Bank of Nigeria Plc |
Fixed Rate Bond |
7.10% |
0.75% |
Easy Access Account |
|
Nottingham BS |
Fixed Rate Bond Issue 53 |
7.10% |
0.25% |
For first 60 days Rollover Base Rate Tracker Account
Moved to 30 Day Notice Account thereafter |
|
West Bromwich BS |
E-Bond 13 |
7.05% |
2.65% |
Guaranteed Growth Bond |
|
ICICI Bank |
HiSAVE Term Deposit
(Customer must hold a HiSAVE Savings Account to qualify) |
7.00% |
4% |
3.75% if agreed to renew bond when first applying otherwise funds moved to linked account |
|
Sourced by www.moneysupermarket.com 02.06.2009 |
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|
Kevin Mountford, head of banking at moneysupermarket.com, said: "Until now some savers will have been somewhat sheltered from the low rate environment, with their cash locked away generating excellent returns. But these savers are about to come down with a bump; some will find the interest paid on their savings has dropped by as much as 7.9 per cent.
"It will be interesting to see whether or not these savers look to riskier investments, such as equities backed vehicles, in order to maintain returns. Those that choose to stick with the fixed rate bonds market will find some solace in several two year fixed rate deals offering over four per cent - still low compared to the highs of last summer, but probably much higher than AER after maturity.
"The golden rule for anyone coming to the end of their fixed rate bond deal is to pay attention to the rate they are getting, and switch to a new deal as soon as the interest rate drops off. If they allow their cash to languish in low interest paying accounts it could cost them hundreds of pounds in lost interest every year."
|
Fixed Rate Bonds |
|
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|
1 Year Term - Based on £5,000 |
|
|
|
|
Provider |
Account |
Deposit |
AER % |
Extra Interest Earned over 1 Year
(compared to 0.10%) |
|
Bank of Ireland |
Fixed Term Deposit Account |
£2,000 |
4.10% |
£200.00 |
|
ICICI Bank |
HiSAVE Term Deposit |
£1,000 |
3.75% |
£182.50 |
|
Bank of Cyprus |
1 Year Term 48th Issue |
£1 |
3.70% |
£180.00 |
|
Newcastle BS |
Fixed Rate E-Bond (Issue 2) |
£5,000 |
3.61% |
£175.50 |
|
Derbyshire BS |
Fixed Rate Bond |
£5,000 |
3.50% |
£170.00 |
|
Sourced by www.moneysupermarket.com 03.06.2009 |
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|
2 Year Term - Based on £5,000 |
|
|
|
|
Provider |
Account |
Deposit |
AER % |
Extra Interest Earned over 1 Year
(compared to 0.10%) |
|
ICICI Bank |
HiSAVE Term Deposit |
£1,000 |
4.35% |
£212.50 |
|
Birmingham Midshires |
Fixed Rate Bond |
£1 |
4.25% |
£207.50 |
|
Bank of Cyprus |
2 Year Term 60th Issue |
£1 |
4.20% |
£205.00 |
|
West Bromwich BS |
E Bond 20 |
£5,000 |
4.15% |
£202.50 |
|
Newcastle BS |
Fixed Rate E-Bond (Issue 3) |
£5,000 |
4.11% |
£200.50 |
|
Sourced by www.moneysupermarket.com 03.06.2009 |
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- ENDS -
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