Are Savings Bonds the savvy saver’s saviour?
20 Sep 2016

To put it bluntly, savers need to be savvier than ever and really do their homework on what savings products will give them a suitable return on their investment.

While the standard savings account is perhaps not promising the returns it once did, it is time for consumers to stretch the net wider when considering where to place their money. Savings bonds could present the individual with the opportunity of a better rate of return interest and at lower risk than other savings products.

There are two types of bonds available – tracker and fixed rate. Tracker bonds offer the customer variable interest rates which will likely move in line with any changes to the Bank of England’s base rate. However, with the fixed rate bond you have the security of knowing you will earn a specified rate of interest for the life of the bond.

In the wake of the EU referendum, certainty around interest rates is harder to predict. For savers who fancy less risk and guaranteed returns on savings, a fixed rate bond could be the answer. An added bonus is that many fixed rate bonds allow consumers to access their interest monthly as opposed to per annum – this is particularly good news to people looking to top up their monthly income or pension.

Most bonds offer a term of between one to five years with minimum deposit amounts ranging from five hundred to one thousand pounds. The larger the amount you can afford to save, over a longer period time, can really make the difference to your savings pot. It is worth noting though that once your money is invested, it may be difficult to withdraw before the duration of your term is complete. If you may need to access your savings funds quickly, check whether this would be possible with your preferred savings bond product.

Contrary to popular belief, there are options available for savers. However, individuals should be considering what their savings goals are, how they can be achieved and which products will ensure those results. The savviest of savers know that research is their secret weapon and investing accordingly.