What To Look For In A Savings Bond

Fixed rate savings bonds give you a higher rate of interest compared to traditional savings accounts. The downside of course is that you must be prepared to put your money in the account and leave it without any access for period of time, usually ranging from one to five years.

When choosing a fixed rate savings bond, there are some important factors to consider before you lock in your account.

• Find out what interest rate you will receive
• Know the exact date of when the bond is due and keep a record
• Understand if you can make withdrawals and the penalties to make them
• What type of deposit is required when you open it and ongoing.
• Know when interest is paid on the bond and when. Is it monthly, annually, or at maturity.

Fixed term bonds may be a great option if: you don’t need money, you think interest rates might fall and the bond rate is fixed, or the premium makes it worth accepting.

Fixed term bonds may not be good if: the money is needed, interest rates might rise and the rate is fixed, you have concerns about the bank, or you can get higher rates elsewhere.

Fixed rate bonds allow savers to lock in at a rate for a specified term, providing them with a guaranteed predictable income from their investment.