Inflation-busting bond launched

Published by Sylvia Morris on 13 October 2010.
Last updated on 13 October 2010

Savers have a chance to keep pace with inflation with the new five-year savings bond on offer from National Counties Building Society.

The Epsom-based society has a 2nd Issue of its Index-Linked Savings bond paying 50% more than the inflation rate at the end of the five-year term. The bond, minimum investment £1,000, runs to 1 December 2015.

The return is taxable but basic-rate taxpayers will still come out ahead of the rise in the cost of living, as measured by the Retail Prices Index (RPI).  

Meanwhile competition is still strong in the cash Isa market. Santander has launched a new version of its Flexible Isa – issue 3 – paying a tax-free 2.85%.

You can't transfer existing cash Isas into this easy access account. The rate will track base rate for the first 12 months  - but guarantees at least 2.85% during that time.

Halifax’s new easy-access Isa Direct Reward pays 2.8%. The rate is variable and the preferential deal lasts for the first year you are in the account. After that your return drops to match the Halifax Isa Saver Direct rate, currently 0.5%.

On taxable fixed-rate deals, Sainsbury’s Bank has a new one-year bond at 3% before tax (2.4% after tax). It also offers 3.5% (2.8%) for two years or 4% (3.2%) for three years on a minimum £5,000. Tesco Bank is also paying 3.5% (2.8%) for two years on £2,000 plus.

On taxable easy-access accounts Halifax has raised the rate on its Guaranteed Saver Reward to 2% (1.8%) for new savers, making it an attractive high-street easy access account. It pays a higher preferential rate for a year, after which you earn the Guaranteed Saver rate, currently 0.5% (0.4%).



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