Post Office launch competitive savings bonds
The Post Office has announced two new competitive bond deals for savvy savers.
Both products give you the option to invest over a shorter amount of time, with the Growth Bond offering 1.60% AER for one year and 1.85% AER for two years. The online deal will give you a slightly better 1.61% AER for one year and 1.86% AER for two.
The minimum deposit for either bond is £500.
However, if you are looking to put away some more cash, then the ICIC Bank HiSAVE three-year fixed-rate account pays a rate of 2.70% on balances more than £1,000, while the Shawbrook Bank three-year fixed-rate bond (issue 16) will give you 2.65% on balances over £5,000.
Over 12 months, the Britannia fixed-rate bond is offering 1.71% AER on deposits over £1,000, while Metro Bank will give savers 1.71% AER on anything over £500.
Henk Van Hulle, head of savings and investments, said: "As one of the UK's leading savings providers we remain committed to giving our customers the best rates possible, especially in such a tough savings environment.
"With a minimum deposit of £500 as well as very attractive interest rates these products are designed to cater for the varying needs of today's savers."
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
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.