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fixed rate bond providers seeking bigger deposits for top deals
Published: 17/06/2009 |
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Andrew Hagger of Moneynet.co.uk looks at recent developments in the fixed rate savings market. The Chesham Building Society will be launching a table topping 1 year fixed rate bond on Friday 19th June paying a very tasty 3.95% gross. The only downside is that it will be out of reach for many savers due to the minimum balance requirement of £25,000. In the ‘post crunch’ environment many providers remain eager to attract retail deposits to increase liquidity in their balance sheets and pull in funds to satisfy future borrowing demand. Banks and Building Societies will be hoping that their ultra competitive rates will tempt savers with bigger sums to salt away. The positives for providers are that they should achieve their new balance targets more quickly and via a smaller number of deposits which will reduce administrative costs. The downside as far as savers are concerned is that their choice of top paying accounts becomes more limited. There are plenty of examples of this ‘cherry picking’ strategy to be found, mainly in the 1 and 2 year fixed rate bond markets as shown in the table below. Although this has been an increasing trend over the last few weeks, there are still currently some decent deals available for savers with smaller amounts to put away.
Source: Moneynet.co.uk 17.06.2009 |
