What types of Savings Bonds are there?

The savings bond markets are vast and varied places, filled with opportunities as well as risks. EMC’s knowledge and expertise can help you understand how to make smart decisions about investing in these markets.

Fixed Rate Savings Bonds guarantee a set interest rate over a specified term – most savings bonds pay fixed interest.

Tracker Bonds track a particular index or rate (for example inflation or Bank of England base rate) over a set period of time, from six months to five years.

Although the minimum investment for some Savings Bonds is £1, the minimum deposit is usually £1,000 or £2,000, with a maximum typically of £500,000. Interest rates are sometimes tiered according to the amount you deposit.

Structured deposits are sometimes advertised as savings bonds. They often promise higher returns, but carry more risk than traditional savings bonds. If you think the bond you are considering may be a structured product contact EMC today and make sure you get the right advice to take action.

The risk and return of Savings Bonds

• You get your original capital back at the end of the term plus the accrued interest.
• These products tend to offer higher interest rates than instant access accounts.
• With Fixed Rate Savings Bonds you know at the outset exactly how much you will receive when the bond matures (however, this is not the case with tracker bonds).

Your original investment will not hold its value in real terms (its ‘buying power’) if the interest you are getting is less than the rate of inflation over the investment period.

For more information, please visit: www.emc-am.com

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