Deposit Plan Offer
Looking for a Capital Protected alternative to Cash?
Potential 10% pa
- Potential 2.5% per quarter if plan called early by counterparty
- Equivalent to 10% per year
- Up to 8 year term
- Early maturity feature possible from year 2 onwards
- If plan runs full term then you receive 2 x FTSE 100 growth over period
- Available as cash ISA, non ISA or ISA transfer
- Deposit taker: Goldman Sachs
Our view: If capital protection is a top priority, yet you still want to achieve potential higher returns then this popular plan from IDAD could be an interesting option.
Important Information: This is a structured deposit plan and is 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.
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IDAD The Callable Deposit Plan
or 2 x Index growth
Investec FTSE 100 6 Year Deposit Plan
at end of term
Investec FTSE 100 Kick Out Deposit Plan
per annum
Investec FTSE 100 3 Year Defensive Deposit Plan
at end of term
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AER fixed on balances up to £20,000
IDAD The Callable Deposit Plan
or 2 x Index growth
Investec FTSE 100 6 Year Deposit Plan
at end of term
Investec FTSE 100 Kick Out Deposit Plan
per annum
Investec FTSE 100 6 Year Defensive Deposit Plan
if FTSE higher, 9% if lower
Investec FTSE 100 3 Year Deposit Plan
at end of term
Investec FTSE 100 3 Year Defensive Deposit Plan
at end of term
Investec FTSE 100 Defensive Kick Out Deposit Plan
per annum
*£50 and a year of free transfers when you open a business account. T&Cs apply. Use the code: FAIRINVESTMENT
Issue FairFX MasterCards to staff, and use the online platform to instantly load cards, monitor spending, and upload transaction data in accounting software at any time
Instant Access Best Buys
Many savings accounts below-inflation interest rates, which means people’s savings are being eroded in real terms.
While there are many savings accounts on the market, many do not offer much of a financial advantage as they offer interest that only matches the base rate set by the Bank of England.
We help you compare a selection of some of the best interest paying accounts.
For savers looking to access their money regularly, a good instant access savings account will offer flexible withdrawal facilities while combining these with a good rate of interest.
RCI Bank – Freedom Saver Account
RCI Bank offer a competitive instant access savings account:
- Instant access savings 1.05% AER/Gross pa (variable)
- Interest is paid monthly or annually
- Unlimited deposits and withdrawals
- Minimum deposit – £100
- Protected by the FSCS
Quick online application setup from RCI Bank
Shawbrook Bank – 45 Day Notice Account
If you are prepared to wait a short period for access to your funds, Shawbrook Bank offer a 45 Day Notice Account:
- 1.05% AER/Gross pa (variable)
- Interest is paid monthly or annually
- Unlimited deposits
- Withdrawals subject to 45 days notice
- Minimum deposit – £1,000
- Protected by the FSCS
Quick online application setup from Shawbrook Bank
With UK savings rates at an all time low you need to take action to ensure your savings are getting the best interest deal possible.
Many savings accounts below-inflation interest rates, which means people’s savings are being eroded in real terms. While there are many savings accounts on the market, many do not offer much of a financial advantage as they offer interest that only matches the base rate set by the Bank of England.
For savers looking to access their money regularly, a good instant access savings account will offer flexible withdrawal facilities while combining these with a good rate of interest.
Santander 123 Current Account
Earn 1.00% AER Fixed Interest for up to £20,000
- 1.00% AER (variable) payable on your entire balance up to £20,000
- Up to 3% cashback on household bills
- Must pay a minimum of £500 into the account each month
- Monthly fee of £5
- Mobile app
Our view: With this current account you get 1.00% AER on the first £20,000 of your cash. To qualify you will need to pay in £500 pm (Equates to a £6,000 pa salary) . Additionally you can gain up to 3% cashback on household bills – 1% on water, council tax bills and Santander mortgage payments, 2% on gas and electricity bills, and 3% on mobile phone, home phone, broadband and paid-for TV packages. The account has full savings FSCS protection.
What are fixed rate bonds?
When trying to save money for the future, there are several options open to cash savers. Options include instant access savings accounts, easy access savings accounts, notice savings accounts, fixed rate bonds and structured deposit plans.
With interest rates at the time of writing at all time lows many savers are looking for a range of best saving plans. For savers who are prepared to tie up capital for a year or more typically higher rates of interest are available from savings providers.
A fixed rate bond is a way of gaining a fixed rate of higher interest on your savings for a fixed period of time, typically between one and five years. Generally speaking the longer your savings can be locked away, the higher the interest rate you can get on your money. Some providers offer fixed rate bonds within a Cash ISA so you benefit from tax free interest returns.
Providers normally have a minimum subscription age of 18 but some providers offer options to younger savers.
How Do Fixed Rate Bonds Work?
Normally there is a minimum commitment for depositing money into a fixed rate bond – usually around £1,000, but this can be more. This makes bonds unsuitable for those who wish to top up a savings account in small increments, as this is not usually possible beyond the first lump sum, therefore could look into alternative savings and investments plans.
Having a fixed term means that bonds have a maturity date at which time you will be contacted by your savings provider and provided with options on how you wish your money to be returned to you – you may be given options of putting the money into a new account in which case you should always shop around before accepting a savings deal offered by an existing provider as the rate of interest may or may not be competitive.
Product providers do not normally allow you to access your money during the term and if they do there are normally conditions which may involve a loss of interest so ensure you read the small print before you sign up. Some fixed interest providers will allow one withdrawal a year without penalties.
Interest paid on your savings is treated as income and you may have to pay tax on it depending on your circumstances. If you don’t pay tax you can receive interest gross if you complete HMRC tax form R85. Some accounts will pay interest gross and it is up to you to declare any tax owed to the Inland Revenue.
Fixed rate bonds are cash deposit based and you will get back your original deposit plus any interest owed unless the bank or building society gets into serious financial difficulty. In the unlikely event that this happens the Financial Services Compensation Scheme would pay compensation of up to £85,000 per account holder per authorised institution.
What to consider when choosing a fixed rate bond
The length of time that savers choose to deposit their money depends on personal financial time frames and other budget and savings considerations. If you need rapid access to your cash, bonds are possibly not the best savings option – it might be preferable to look at an alternative savings options or just an instant access savings accounts.
Minimum deposits can vary from £500 to over £2000. Make sure that you are happy to part with that amount of money for a longer period of time! It is worthwhile having a five-year plan of projected expenses – such as mortgages, car purchases, or planning for a family or retirement – to ensure that you will not need access to your fixed rate bonds account.
Withdrawals are either not permitted or restrictions will apply. Read the provider terms and conditions so that you know what you are getting into. Some providers for example will allow one withdrawal during the term without penalties.
The payment of interest can also vary- some offer monthly interest, others quarterly or annually, and some only pay at the end of the agreed term. Choose a product that fits in with your requirements for the best rates of high interest.
Tax is payable on interest accrued unless you are a non tax payer in which case you can receive interest gross if you complete HMRC tax form R85. Alternatively it is often possible to take a Cash ISA fixed rate bond (current cash ISA allowance for 2018/19 is £20,000 per individual) from which interest can be taken tax free.
If you have cash ISAs from previous tax years you may be able to transfer to a new Cash ISA provider offering a fixed rate bond cash ISA deal.
Please note that this information is based on current law and practice which may change at any time.
Top 10 tips for your 2020 fixed rate bond selection
1. Consider all options – from instant access to fixed rate bonds to instant access options – All have advantages and disadvantages when trying to build a nest egg for the future.
2. Check the market – shop around to find the right savings plan for you. Interest rates are changing all the time and deals come and go on a regular basis.
3. Make sure you find a product that works for you – The choice of bond is dependent on the amount of money you intend to deposit, the fixed rate, and the length of the fixed rate period. Whether you want the account to be operated on an online account basis, postal basis or telephone basis. These should all be taken into consideration before making your choice. Read the savings provider terms and conditions carefully.
4. Read the fine print – determine when the provider is likely to let you access your money, how much notice is required, and if there are any penalties for requesting access before the bond matures.
5. Some deals require you to have the interest paid into a current account – check the small print.
6. Check the small print on how interest is paid – If monthly or annually this will be need to be declared if you submit a tax return. If interest is paid on maturity this may be useful for tax planning purposes.
7. Many deals require you to have internet access – Some are offered on a postal or branch basis – check the small print.
8. Check that your money is covered by the Financial Services Compensation Scheme – they will guarantee £75,000 of savings against institutional failure. Most UK banks should have this cover, but Irish banks that do not have a UK arm may not be covered by the FSCS.
9. Check what happens when your savings product matures – Providers will write to you when your account matures; if you do not respond the provider will often put your savings into a low or no interest holding account until you provide instructions on what you want to do with the money. It is therefore important to diarise the maturity of your bond and have in mind what you want to do with the money.
10. What is the tax treatment if you are a non taxpayer – If you are not a tax payer many providers will pay interest gross on submission of the relevant HMRC tax form.
Top UK Current Account – Earn up to 1.5% AER on up to £20,000
Some of the best rates of interest you will get on cash currently are on current accounts. The Santander 123 Current Account offer 1.5% AER for in credit interest on balances up to £20,000, plus up to 3% cashback on household bills – More info…