I have always been pretty rubbish at saving, my Mum used to say “your money burns a whole in your pocket” but as you get older and become a parent, responsibility kicks in (sometimes) and you start to think more about the future. There are all kinds of savings plans available, some for the more daring who don’t mind taking a few risks and gambling their money on stock markets and the like, others like me who like security and to know where their money is going and what it will make, there are fixed rate bonds.
A fixed rate bond is a method of saving money over a fixed period, usually between 6 months and 5 years with a fixed rate of interest. When you first set up your bond you can agree the amount of money that you want your money to earn. The interest earned can be paid annually or at the end of the term of the bond but no money can be withdrawn until the bond matures at the end of the fixed rate term.
Is a fixed rate bond for you?
- A fixed rate bond is a good choice of saving if you have a lump sum of money which you want to invest and can afford to have it locked away for a specific amount of time.
- You can decide how much you want to save and how long you want to save for. Perhaps you are getting married and want to make sure you don’t spend those precious pennies too early, invest the money and fix the end of term for 6 months before the wedding date to ensure you have all the money you need to make your day special.
- With a fixed rate bond you can generally secure higher interest rates than if you were to choose an instant access savings account.
- You can be secure in the knowledge of where your money is and what it is doing for you, no nail biting conclusions!!
Lloyds TSB International offer fixed term deposits from 1 year in sterling, US Dollar and Euro and 5 year Fixed Term Deposits in sterling. However, if a fixed term doesn’t sound like your sort of thing they have all kinds of savings accounts available from International Bonus Saver Accounts to Structured Deposits, Offshore Investment Funds and Lifestyle Portfolios.
How will you save for your rainy day?