If you have some savings you want to put aside and you can afford to lock in an investment for a predefined period of time you might be interested in a fixed rate bond. Northern Rock fixed rate bonds are not currently available; following nationalisation Northern Rock’s entire issued share capital was acquired from HM Treasury by Virgin Money in 2011. You may be interested however in a fixed rate bond from Virgin Money before you decide however you could use the comparison table below to view fixed rate bonds from a variety of different providers.
Although a Northern Rock fixed rate bond is not available those provided by Virgin Money Feature:
- Choice of monthly or annual interest payments
- Apply online, in store, by post or by phone
- Minimum balance £1
- Maximum balance £1million
- Terms available of 1, 3 and 5 years
- Early closures and withdrawals not permitted during fixed rate period
- Top open you must be a permanent UK resident aged 16 or over
As the nature of a fixed rate bond is for lump sum investment most won’t let you make any additional deposits or withdrawals to the account once you have set it up, therefore before investing in you should shop around to find the one which best fits your specific requirements before locking your money away, you can use the comparison tables above to look at fixed rate bonds different providers may be able to offer. You may also want to consider alternative savings options as well.
Alternative saving plans include:
- Tracker Bonds – Tracker bonds are similar to fixed rate bonds but, instead of the rate of interest you receive staying consistent over the bond’s term, it will vary in reaction to any changes made to the Bank of England’s Base Rate which it is link to. This means you could potentially end up with a better or worse rate of interest on your bond so you cannot predict how much interest you will get in return beforehand like you can with a fixed rate bond.
- Structured Deposit –Structured deposits are another savings option which requires you lock your savings away for a period of time however tend to offer higher potential returns on your investment than bonds, but you are not guaranteed to get the interest return. Structured Deposits are linked to an index or indices such as the FTSE 100. Your plan will state how the index it is tied to needs to perform in order for you to receive an interest payment. This means you risk making no interest on your investment and may only get your original investment back, therefore you should carefully consider if this plan if suitable for your needs before applying.
- Instant access savings account – While instant access savings account usually accrue lower interest rates than bonds or structured deposits, most of them permit unlimited free withdrawals, so you have quick access to your savings if you ever need them.