Savings Bond
People are worried about savings accounts today – figures show that the average savings account rate has fallen dramatically over the last 12 months:
Also, people are rightly concerned that any money invested into a bank or a building society could disappear if the institution were to fail. The Financial Services Compensation Scheme does cover losses up to £50,000 but only with UK deposit takers. It also may take weeks to have your precious savings returned to you. That’s why a savings bond is a smarter choice right now, because it offers security and guarantees that savings accounts just do not offer.
One savings bond that is particularly rewarding right now is the Guaranteed Capital Account 24 from Dunbar Bank. It’s a savings bond that is linked to a five-and-a-half year deposit account that gives you security and growth potential with returns linked to the London stock market. So as you invest into the account, it works with the markets – so if the markets move up, so do your profits.
If you’re concerned that the stock market may fall and the savings bond will lose money, don’t worry – this account includes the protection of a money-back guarantee, so you won’t lose any of the money you deposit. So if you have invested £2500 or £1m into the savings bond, you’re safe.
This particular savings bond gives you all of the growth of the stock market index, unless that growth reaches 80%. If, at any time during the term of the savings bonds, the stock market has grown by 80% or more, the interest will be equal to 25%. Any interest earned is paid at the end of the five-and-a-half year term. So if the stock market has risen over the term, you make money, it’s as simple as that (and there is no reason why it shouldn’t – in the last three months alone the FTSE has risen by more than 20%**)
But you have to act now - the Guaranteed Capital Account 24 savings bond is a limited offer, once it’s gone it’s gone. A great savings bond like this, with security like this, should not be missed. The last date for applications is August 17 2009 but you may miss out if the account has been oversubscribed. The longer you have your money sitting in a low rate savings account, the less money you could be making with a great, secure bond.
* Bank of England, June 2009
** FTSE 100, Mar 6 2009: 3530, Jul 3 2009, 4247.
