Scottish Widows 5 year bond paying 5.25%

Steve_xx

Scottish Widows have today launched a 5 year bond paying 5.25%:

5 YEAR FIXED TERM DEPOSIT:

A fixed term post or telephone operated account maturing on 22.9.14 with a minimum investment of £10K paying 5.25% on anniversary (5.15% quarterly, 5.128% monthly).

Earlier access on closure only subject to 365 days loss of interest. Further additions not permitted.

Bank of England Base Rate paid until term starts on 23.9.09. Interest on deposits of £50K and over paid gross.

Note: there is a hefty loss of interest should you choose to close the bond early, not to mention the fact that the account will only pay at base rate until the start of the term on 23 September. Therefore, if you were to cancel in the first year you could in fact end up with less cash than you deposited!

Link:http://www.scottishwidows.co.uk/bank/savings/fiveyearfixedtermdeposit_rates.html

Reaper

Steve_xx wrote: »

Earlier access on closure only subject to 365 days loss of interest.

Actually it is "charged an amount equal to 365 days' interest" which different to 365 days loss of interest. The effect is, as you rightly say, that it may actually eat into the capital.

That's a great rate, but 5 years is a long time to be locked in when some (not all) economists predict a period of inflation ahead.