Bond maturity?

studentsaver2007

I wanted to put some money into a 1 year bond this month.

I was told that the bond "matures in december 08."

I would assume a 1-year-bond would mature a year after investing, isn't that the point? I'm very confused.

If it matures next december, will the interest rate not apply until this december?

dunstonh

If you check the T&C you will probably find that it is a one year FIXED TERM DEPOSIT from a starting date in December with an allowance for early savers.

These fixed term deposits often get issued in tranches with a start date and end date fixed. An early saver bonus or rate is often applied to encourage you to get in early.

Conventional fixed term deposits, such as those arranged based on money market rates, have daily rates and would apply 1 year exactly. However, banks dont tend to publish these as they are aimed for businesses and larger deposits and of course daily fluctuations make it hard to publish figures. Tranches are much easier for them to market for the average consumer.

studentsaver2007

Thank you very much for that, though there was no mention of any 'early saver bonus', what can I assume will happen to my money between now and December?

the bond is question: http://www.cheltglos.co.uk/fixedRate_0.html

dunstonh

In the case of C&G the early bonus is the extra period of a fixed rate. You get 15 months instead of 12. You can spot it's a tranche as it has an issue number.

studentsaver2007

So I'll get 15 months at the bonds fixed interest rate? Perfect.

Thank you so much! :T

This should really be taught in schools, it's ridiculous that we're handed thousands of pounds of student loan & given no education on savings & investment.