New inflation rate bonds launched today
22 March 2011
BM Savings has launched two new inflation rate bonds today.
The 5 year inflation rate bond (issue 2) and 3 year inflation rate bond (issue 1) are deposit based accounts which use the annual rate of inflation (as determined by the Retail Prices Index (RPI) annual inflation rate measure) to calculate the annual gross interest rate on your savings. You'll also receive a fixed rate of interest each year of 1.50% gross/AER on the 5 year inflation rate bond (issue 2) and 0.75% gross/AER on the 3 year inflation rate bond (issue 1).
The All Items RPI is an official measure of the level of prices of goods and services bought by most UK households, which can be used to calculate the rate of inflation. It is compiled by the Office for National Statistics (ONS) and is currently one of the most familiar general measures of inflation in the UK. Each month the ONS publishes an RPI annual inflation rate which represents the percentage change in the All Items RPI over the previous 12 months.
Your gross interest rate will match the RPI annual inflation rate and any interest will be paid each year on the anniversary of the start date of the account.
You can save from just £500 up to £1 million for each customer (£2 million for joint account holders). Access is not permitted during the term. If you're unable to commit to a 3 or 5 year term or require access to your savings these accounts aren't the right accounts for you.
These accounts have a limited amount of money that can be deposited in them. The issue will close on 16 May 2011 or earlier if the limit is reached.
Taxation means the annual net return on savings within the inflation rate bond could be less than the rate of inflation.
Rates correct as at 22 March 2011.
For more information about these accounts please see the 3 year inflation rate bond (issue 1) account page or the 5 year inflation rate bond (issue 2) account page, alternatively phone our savings team on 0845 603 2191.
Back to news listing