With the Bank of England’s base rate at its all-time low of 0.5%, savers may wonder which savings and investments will provide the most lucrative return, or whether investing in new products is worth it. With a grim financial forecast, our savings and investments are now more important than ever and it pays to stay on top of the best savings products on the market.
THE BASIC BONUS
Just as the public will find themselves in a position where they will need to lend money at some point or another in their life (mortgages, for example), businesses and the government also occasionally need financial help. The substantial amount of money required by these large infrastructures is best accumulated by issuing bonds to the public market. So a bond is a loan in which a member of the public becomes the borrower’s lender or the bond issuer, such as a bank. The number of investors, sometimes thousands, each provides a share of the capital needed by the issuer. In exchange for the bond, the investor is rewarded with interest payments.
THE FIXED RATE BONUS
If you have a financial lump sum to invest, a fixed rate bond could be the perfect investment vehicle. As the title indicates, a ‘fixed rate’ will pay a guaranteed amount of interest over a set period of time. You will have the security of knowing in advance what your savings will earn.
FIXED RATE BONDS FACTS
– Gives exactly what it says on the tin; the advantage or guarantee a fixed or “fixed” amount of interest. This gives you a sense of security that if the Bank of England’s base rate falls, and therefore the interest rates of its issuers as well, you will remain with a higher interest rate. In this case, your investment will work hard for your money.
– The interest rates offered on bonds are usually higher than those of instant access savings accounts.
– Fixed rate bonds are especially good for savers who are easily tempted, as you will not be able to touch their money until the fixed term is completed.
– Usually there is a minimum deposit ranging from £ 1 to anything even above £ 50,000.
– There is also a specific period of time in which your relationship will be hired, which usually ranges from 6 months to 5 years.
– Depending on the voucher and the provider you are with, you probably will not have access to your savings during the fixed term. It is important to invest money that you can only afford to lock up.
– Early closing, withdrawals or deposits may Advanced Payment Bond not be allowed or result in an additional fee.
– Having a fixed rate means you know exactly how much you will receive at the end of your return so you can plan and organize your finances.
– A fixed rate bond could be used as an income or an increase in income during retirement. Its fixed rate means you know exactly how much you will receive so you can plan and organize your finances.
– It is a low risk investment, as you are guaranteed a fixed and constant interest rate, even if interest rates drop. Alternatively, the national inflation rate could rise more than the interest you will earn on a bond.