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BM Savings launches four new inflation rate bonds and ISAs

12 March 2012

BM Savings has launched two new inflation rate bonds and two new inflation rate cash ISAs with the option of a three year or five year term. This follows the successful launch of the three and five year inflation rate bonds and ISAs in 2011. Each year, customers will receive either the annual rate of inflation as measured by the Retail Prices Index (RPI) or a fixed rate of interest of 4.30% gross/AER on the five year term bond and 4.30% tax free/AER on the five year inflation rate cash ISA or 3.70% gross/AER on the three year term bond and 3.70% on the three year inflation rate cash ISA, whichever is greater.

You can save in the inflation rate bonds from just £500 up to £1 million for each customer (£2 million for joint account holders). For our inflation rate cash ISAs the minimum deposit is £500. You can save up to £5,340 in the 2011/2012 tax year and from 6th April 2012 up to £5,640 in the 2012/2013 tax year. Transfers from other cash ISAs allowed as long as the issue remains open. Access will be permitted subject to a 5% charge on the amount withdrawn. If you're unable to commit to a 3 or 5 year term these accounts aren't suitable accounts for you.

These accounts have a limited amount of money that can be deposited in them. The issue will close on 1 May 2012 or earlier if the limit is reached.

Information correct as at 12 March 2012.

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Gross is the contractual rate of interest payable before the deduction of income tax at the rate specified by law.

AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. As every advertisement for a savings product, which quotes an interest rate, will contain an AER you will be able to compare more easily what return you can expect from your savings over time.

NET rates are illustrative only, allowing for the deduction of income tax at 20%. If you are a higher rate tax payer, you may have a further amount to pay. If we deduct more tax than you have to pay this can be reclaimed from HMRC.

Tax free is the contractual rate of interest payable where interest is exempt from income tax.

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Birmingham Midshires is a division of Bank of Scotland plc, which is authorised for accepting deposits by the Financial Services Authority. It is entered in the FSA's Register and its Register Number is 169628. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh, EH1 1YZ.
To contact the FSA Consumer helpline, please ring 0300 500 5000 or visit www.moneyadviceservice.org.uk/.