United Trust Bank’s recently launched 2 and 3 year Tracker Bonds offer an innovative solution to savers who don’t want to keep moving their savings, but also don’t want to miss out if interest rates start to go up.
The bonds, which track movements in the Bank of England base rate, offer competitive starting rates of 2.6% Gross/AER* for the 3 year bond and 2.25% Gross/AER for the 2 year bond but these will move up or down in line with the Bank of England base rate, currently 0.5%. (Interest paid annually.)
For example, on the three year bond, if the Bank of England increases its base rate to 0.75%, the interest payable on the 3 Year Tracker Bond will move to 2.85% Gross/AER. Of course, if the Bank of England drops the base rate below 0.5%, the rate payable on the bonds will go down.
For savers with more than £500 to invest, who want a competitive initial rate of interest, are happy to tie their money up for 2 or 3 years but don’t want to lose out if the Bank of England puts its interest rates up, these bonds are well worth considering. But don’t just take our word for it. Take a look at what The Telegraph had to say about them…
* AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.