Boost for Fixed-Rate Bonds iArticleBeach.com - Free Articles for Reprint. Add great content to your web site today

Home | About Us | Contact Us





Forgot Password? New User?

	Poetry
	Business
	Music
	Humor
	Arts & Entertainment
	Movies
	Destinations
	Women Issues
	Home Improvement
	Dating
	Real Estate
	SEO
	Health & Fitness
	Investing
	Home Based Business

View all Categories

Welcome to iArticleBeach.com - Free Articles for Reprint. Add great content to your web site today!

Articles » Finance » Investing >> View Article

Boost for Fixed-Rate Bonds

By: Esther Shaw

Savers have had little to cheer about of late as the rates paid on their nest eggs have plummeted lower and lower in line with a string of interest rate cuts. In fact, you could now be earning next to nothing on the money you have squirreled away, given that nearly half (41%) of savings accounts for balances of £1 are currently paying 0.1% or less in interest, while three are paying no interest at all.*

But with base rate on hold at an all-time low of 0.5%, savings providers have had a chance to review their positioning in the market, and there are now signs of improvement.

Battle of the bonds

Competition is re-entering the savings arena and this is particularly apparent in the fixed-rate savings market, where a flood of new fixed-rate bonds have been launched - paying pretty decent levels of interest.

While rates are nowhere near the heady heights of last year, when the top-paying accounts broke through the 7% barrier, there are now nearly 40 bonds paying rates of 4% and above. This is in stark contrast to the end of February, when you'd have been hard-pressed to find a single bond paying anything like this rate.

Long-term commitment

But to cash in on these new great rates, you do need to be prepared to lock your money away for the duration of the bond - without being able to get your hands on it. And, to cash in on the very best rates currently on offer at the moment, you are going to have to tie up your money for two years or more, as providers are focusing their attention on their long-term fixed-rate deals.

Sign up to a short-term fix

That said, given that no-one can predict when and how quickly base rate and savings rates will recover, you may actually be better off tying your money up for the shorter term - for no more than 12 or 18 months, say. After all, the economy is cyclical - and you don't want to find yourself stuck on an uncompetitive rate if the cycle turns and rates start rising again.

Our pick of the current bunch of fixed-rate bonds

At present, one of the top picks for those who want to fix is the one-year ICICI HiSave fixed-rate account, paying 4%** on a minimum investment of £1,000. Follow the link to find more information on this and the other savings accounts currently available.

Take note of the strings attached

Before jumping headfirst into a fixed-rate savings bond, it is crucial you know the full terms of the account:

• First off, you must be able to meet the minimum funding requirement. This is usually a deposit of £500, but could range as high as £5,000 - or even more.

• Note that many deals only permit one deposit, which means you can't pay additional money in after the account has been opened.

• Be aware that while some bonds will permit access, with most, you cannot make withdrawals without significant penalty of some or all of the interest earned up to that point.

• Check what happens to your money when the fixed term ends. Some providers allow you to nominate an account for the money to be moved into, but others will transfer the money to a default account paying a paltry rate.

• Remember that if you are the type of person who wants to dip in and out of your savings, a fixed rate bond is not for you.

Going forward

* Investec Private Bank report - rates on 41 % of savings accounts for balances of £1 teetering on 'death row.'
** rates correct on 02/07/09

--
There is now hope that in the weeks to come, other providers will follow suit and savers will be able to get a better rate of return on their money. In the meantime, make your money work harder by finding better savings rates at http://www.confused.com/savings

Total Views : 381 Word Count Appx. : 642

See All articles From Author

Wed, 08 Feb 2012 20:57:39 GMT Review: Soulo converts iPad into karaoke machine (AP)

AP - Karaoke lovers typically fall into two categories: Those who enjoy it, and those whose arms have to be twisted to get up and sing in public.

Wed, 08 Feb 2012 22:53:14 GMT Lawsuit seeks to block Google's privacy changes (AP)
AP - A consumer watchdog group is suing the Federal Trade Commission in an attempt to prevent Google from making sweeping changes to its privacy policies next month.

Thu, 09 Feb 2012 06:35:55 GMT Lenovo 3Q profit up by half, warns of disk supply (AP)
AP - Lenovo Group Ltd., the world's second biggest personal computer maker, said Thursday that quarterly profit grew by more than half but warned hard drive costs would remain high amid a global shortage.

Thu, 09 Feb 2012 01:32:25 GMT Just Show Me: How to check your data usage on Android 4.0 (Yahoo! News)
Yahoo! News - Welcome toÂ Just Show Me onÂ Tecca TV, where we show you tips and tricks for getting the most out of theÂ gadgets in your life. In today's episode we'll show you how to check your data usage on yourÂ Android 4.0 phone. Android …

Thu, 09 Feb 2012 01:27:02 GMT Far-out footage: Water droplets orbit a knitting needle on the International Space Station (Yahoo! News)
Yahoo! News - When NASA astronaut Dan Burbank left Earth for theÂ International Space Station as part ofÂ Expedition 30 last November, he took along some knitting needles, but not for making a space sweater. The mission's commander brought them to make a point â€” …

Thu, 09 Feb 2012 00:19:11 GMT 'Bachelor' Contestant Courtney Gets Auto-Tuned [VIDEO] (Mashable)
Mashable - Fans of The Bachelor are all too familiar with this season's over-the-top contestant Courtney, who makes snide comments at the camera and likes to take off her bikini top.

Thu, 09 Feb 2012 02:10:29 GMT ESPN falls to third in online sports site rankings (Reuters)
Reuters - Yahoo Sports remained the most popular U.S. online sports site in January, but the most eye-catching news was ESPN.com falling to third place behind FoxSports.com.

Wed, 08 Feb 2012 22:50:20 GMT McCartney to debut new songs live on iTunes stream (AP)

AP - Paul McCartney will debut the songs from his new album "Kisses on the Bottom" in a free live streaming performance on iTunes.

Thu, 09 Feb 2012 06:10:00 GMT Washington Footing the Cell Phone Bill for Millions of Low Income Americans (Time.com)
Time.com - Last year, a federal program paid out $1.6 billion to cover free cell phones and the monthly bills of 12.5 million wireless accounts

Thu, 09 Feb 2012 11:29:56 GMT Vodafone hit by weak southern Europe (Reuters)
Reuters - Vodafone, the world's largest mobile phone operator, missed quarterly revenue forecasts on Thursday as increasingly tough trading in Spain and Italy overshadowed solid performances in emerging markets and northern Europe.

Thu, 09 Feb 2012 05:21:16 GMT Analysis: Investor activists see little to "like" in Facebook (Reuters)
Reuters - A new crop of companies entering the U.S. public markets, including such high-profile offerings as Facebook, are turning the clock back on the way U.S. corporations are run.

Thu, 09 Feb 2012 03:31:41 GMT Sony abandons PlayStation Vita UMD Passport plan in North America (Digital Trends)
Digital Trends - As reported by Kotaku earlier today, Sony is ditching plans to allow new Vita owners to download PSP titles that they currently own on UMD disc. Sony rolled out this program in Japan at launch during December 2011 and allÂ Japanese owners can register their UMD titles on the Vita by paying a fee based on the value of the game, thus Japanese owners can avoid having to repurchase the titles at full cost on the PlayStation Vita digital download store. New PlayStation Vita owners in North America onÂ February 22Â will have to keep the PSP in order to access old titles or repurchase older games at full price to utilize the software on the newer handheld system.Â

Wed, 08 Feb 2012 22:35:00 GMT Update: Path now lets users opt-out of sharing contacts (Appolicious)
Appolicious - Update: Path now lets users opt-out of sharing contacts

Wed, 08 Feb 2012 23:21:28 GMT Apple's patent plea: Stop Samsung and Motorola from holding us hostage (Digital Trends)
Digital Trends - The world of patent licensing often seems like a maze of twisty little passages, all alike, but every so often the industry stumbles into a new tunnel â€” or, at least, one that seems new at first glance. Such is the case with Apple, which has asked the European Telecommunications Standards Institute (ETSI) to establish a set of basic principles governing so-called fair, reasonable, and non-discriminatory (FRAND) licensing of patented technologies included in wireless communications standards. That sentence may make many consumersâ€™ eyes glaze over, but it boils down to this: Apple wants rules saying that if a company contributes their technology to a standard, they donâ€™t get to use that technology to beat up competitors who use that standard.

Thu, 09 Feb 2012 09:13:31 GMT Operator of radical Muslim site to plead guilty (AP)
AP - A Muslim convert from Brooklyn who ran a website that posted threats against the creators of the television show "South Park" for supposedly insulting the prophet Muhammad is expected to enter a guilty plea.

Thu, 09 Feb 2012 11:49:54 GMT German court says Samsung can sell reworked tablet (Reuters)
Reuters - Samsung Electronics Co Ltd's reworked tablet PC does not look like a copycat version of the iPad, a German court said, affirming a preliminary assessment and dealing another legal blow to Apple Inc.

Wed, 08 Feb 2012 19:54:00 GMT Gameloft releases new social platform app for Android (Appolicious)
Appolicious - Mobile game maker Gameloft is responsible for some of the biggest-budget, biggest-name games on Google’s Android operating system (as well as Apple’s iOS), which is probably why it has 7 million registered players in its proprietary gaming network. Today the company released a new app that lets dedicated Gameloft fans access that network even when they’re not playing Asphalt 6 or Modern Combat.

Wed, 08 Feb 2012 20:22:33 GMT The U.S. and China: A Duel to the Debt (The Motley Fool)
The Motley Fool - In this period of "exceptional uncertainty" (to quote Federal Reserve Chairman Ben Bernanke), where can investors turn for a considered perspective on the current environment? Produced to feed the beast of the 24-hour news cycle, the bulk of financial journalism and commentary today isn't worth the servers it is stored on. One notable exception to that rule is Buttonwood, the financial markets column of The Economist. Philip Coggan is the columnist -- arguably the most influential position in financial journalism (along with the head of Lex at the Financial Times).

© 2006 - Present - iArticleBeach.com - Free Articles for Reprint. Add great content to your web site today. All Rights Reserved. Use of our service is protected by our Privacy Policy and Terms of Service