Leeds steps up with unique escalator savings bond
A unique three year escalator bond has been added to Leeds Building Society’s portfolio of savings products.
The competitive bond offers fixed rates of 2.00% in its first year, 2.25% in its second and 2.75% in its third year, giving an average return of 2.33%.
In line with other fixed rate savings products in the Society’s range, penalty-free access is permitted to 25% of the capital invested.
“In a rising rate environment, the security of knowing the return from this bond will rise over the term makes it even more attractive,” said Jaedon Green, Leeds Building Society’s Director of Products.
“Inflation has been below the Bank of England’s 2% target for almost two years – this bond’s rates, in each of the three years, give an inflation-beating return.
“Whilst fixed rates are typically used for those who want certainty of interest, it usually means you need a flat interest rate across the period. In contrast some customers need an increasing return, whether it is for tax planning or income planning.
“The combination of an escalator bond, plus a flat rate bond, allows us to offer the best of both worlds.
“The penalty-free access to up to a quarter of the investment is another useful feature.”
Rachel Springall, Finance Expert at Moneyfacts.co.uk, said: “This is a really interesting launch from Leeds Building Society as it is the UK’s only three-year escalator bond. This is a great innovation for savers, and could be a welcome addition to an investment portfolio.”
Savers can choose to have their interest credited to the account or paid into another savings account with the Society or elsewhere.
The bond can be opened in branch, by post or online, and can be operated in branch or by post.
Notes to Editors
Three year escalator bond
- 2.00%/2.25%/2/75% gross/AER in years 1/2/3 respectively
- Average rate across the term 2.33% gross/AER
- Minimum Investment £100
- Maximum investment is £1m (£2m for joint accounts)
- Interest paid annually on 31st October (commencing 31st October 2016) (credited to the account or another account) and on maturity on 31st October 2018
- Access permitted to 25% of the capital investment without penalty, no further withdrawals are permitted
- Available to open in branch, by post and online; can be operated in branch or by post
Leeds Building Society has 67 branches throughout the UK, Gibraltar and Ireland and assets of £12.7bn (as at 30th June 2015). The Society has operated from the centre of Leeds since 1886.