2009 has seen many ups and downs in the financial markets, consumers have responded by looking to lock away their money in fixed rate savings accounts and fixed rate bonds. These products produce some certainty in a very difficult financial inviroment.
The Co-operative Financial Services (CFS) has launched a three year bond offering a fixed rate of 5% to be sold through both CFS and Britannia branches.
The bond went on sale at the end of November and will be available through the group’s branch network, subject to a minimum investment of £5,000 and a maximum of £1 million. Interest is paid annually.
An account can be closed 30 days before the end of each 12 month period, subject to interest penalties of 2% for the past year. Therefore, closing in year two would not affect interest accrued in the first year, but would reduce to just 3% for the second year.
John Hughes, director of retail products at CFS, said that the option to access the funds after each one year period is likely to prove attractive to savers who can sometimes feel locked in by fixed rate bonds.
He explained: “We know that access to funds has become an important issue for customers in the current climate, so we’ve introduced an annual window for savers. As we edge towards the end of 2009, a year which has seen some of the lowest interest rates ever, we're hoping to give savers a real Christmas boost.
“This launch is also a major step for the business, as the first new product that is available from both Britannia and The Co-operative Bank.”
The two organisations merged on 1 August 2009 and now have combined assets of £70 billion and nine million customers.
It expect the appetite for the best fixed rate bonds products to remain high through 2010 as certainty remains around the economy
ENDS
Author Resource:-
J magth has written for a number of years on finance and author of this article on Best fixed bonds.
Find more information about Guaranteed income bonds here.
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