Yorkshire BS launches bond paying 3.25%
The rate beats most of those offered by the few 18-month bond providers - only Barnsley Building Society offers savers the same competitive rate.
The minimum investment required for the account is £1,000 and the account can be managed online, in branch or by post.
But remember, as with any fixed-term bond, early closures or withdrawals are not permitted. Additional deposits are allowed by bank transfer, but only while the account remains open to new customers.
With instant-access rates falling left, right and centre, locking your money away could be a good option, as bonds tend to offer more competitive rates than no-notice accounts.
Although the rates tend to rise with the length of the bond, many savers don’t feel comfortable locking their money away for, say, five years, so the 18-month term offered by Yorkshire BS may strike the ideal balance for some people.
The bond will mature on 31 March 2014 and interest can be paid monthly or annually.
You will need to act quickly if you want to secure this bond as it is a limited-issue product, which means it can be withdrawn at any time.
You can apply online at ybs.co.uk or by calling 0845 1200 100.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.
Where APR is the rate charged for money borrowed, Annual equivalent rate is how interest is calculated on money saved. The AER takes into account the frequency the product pays interest and how that interest compounds. So, if two savings products pay the same rate of interest but one pays interest more frequently, that account compounds the interest more frequently and will have a higher AER.