Charity Savings Rates roundup July 2013
Charities frequently face obstacles when it comes to getting a good interest rate on their savings. At Fair Investment we’re working with various financial service providers to help bring you better interest rates on your charity’s savings. See below for our selection of the best charity savings accounts currently available.*
Latest easy access account deals
If you’re looking for easy access to your charity’s funds, an easy access account might be worth considering. The Scottish Widows Charity Deposit Account offers a 7-day notice period and requires a minimum deposit of £500, with an interest rate of up to 0.40% gross AER.
Latest notice account deals
Opting for a longer notice period could mean potentially higher interest rates on your charity’s savings. Manchester Building Society’s Business Tracker Account accepts deposits from £10,000 to £75,000 for registered charities and allows up to 12 withdrawals per year subject to 45 days notice. The account also guarantees an interest rate that’s 1.10% above the Bank of England Base rate. New customers are offered a rate of 1.60% AER/gross.
Latest fixed rate bond deals
For those looking to save for a longer period of time, there are terms available ranging for nine months to three years. The shortest term is available via the 9 Month Bond for Charities from Principality, which offers 0.75% AER/gross. For those looking to tie up funds for longer, Cater Allen offers charities a choice of a 1, 2 or 3 year Fixed Term Deposit Plan, with rates of 1.30%, 1.60% and 1.80% AER/gross respectively. The minimum deposit for all three options is £50,000.
For those looking for a 3 year fixed rate bond with a lower minimum deposit, Scottish Widows offers a 3 Year Fixed Term Deposit with a rate of 1.50% AER/gross, fixed for three year, with a minimum deposit of £10,000.
AER – Stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. (As every advertisement for a savings product which quotes an interest rate will contain an AER, you will be able to compare more easily what return you can expect from your savings over time)
Latest fixed rate bond alternatives
If you’ve considered fixed rates in the past for your charity savings, you may be interested in structured deposit plans, which provide an alternative to traditional fixed rate bonds. These accounts offer the potential for market-linked returns while protecting your capital. The Investec Deposit Growth Plan offers returns of 120% x any FTSE 100 growth – with no upper limit – over a five year term.
If you are looking for growth, the Legal and General 6 Year Growth Deposit Bond, which offers 125% x any growth in the FTSE 100, subject to a 35% cap. The plan can be opened with deposits from £500.
In the structured deposit plan mentioned above, growth in the Index is measured by comparing the Final Index Level to the Initial Index Level. If, at maturity, the Final Index Level is equal to or lower than the Initial Index Level, your original capital will be repaid but you will not receive any return.
Structured deposit plans are capital protected. There is a risk that the company backing the plan or any company associated with the plan may be unable to repay your initial investment and any returns stated. In this event you may be entitled to compensation from the Financial Services Compensation Scheme (FSCS), depending on your individual circumstances. In addition, you may not get back the full amount of your initial investment if the plan is not held for the full term. The returns from structured deposits are not guaranteed. The past performance of the FTSE 100 Index and any companies listed on the FTSE 100 Index is not a guide to future performance.
No news, feature or comment should be seen as a personal recommendation to invest. If you are in any doubt as to the suitability of a particular investment you should seek independent financial advice.
* Data accurate as of 05/07/2013.