Fixed Term Savings Bonds and Fixed Rate Bonds

There are so many savings and investment products available from such places as banks, building societies and the Post Office it is a bit of a minefield as to knowing which one to select and put your money into. In fact you may end up investing in more than one product.

If you walk through the door of one of the above financial institutions they have a vested interest in selling you their own savings accounts so, if you are unsure what you require you could consider seeking independent financial advice.

There are so many factors that affect your decision as to where you should invest your monies such as the amount available, your attitude to risk, how long you wish to invest the funds for, tax status, have you utilised your ISA allowance, do you have any liabilities on which you are paying a high rate of interest that you may wish to reduce or clear with the funds instead and how much do you wish to retain in case of emergency.

If you are prepared to consider fixed term savings for some of the funds which are where you would tie up a sum of money for a fixed period of time then you could consider such things as variable rate bonds or fixed rate bonds.

With fixed rate bonds the interest rate is fixed for a set period of time usually ranging from one to five years so you have peace of mind knowing that if interest rates were to fall your interest rate would not change.

Of course, if interest rates rise, then your rate will not in which case you potentially could have done better by investing in a savings account with a variable rate of interest such as a variable rate bond as there rates can go up but, be aware, also go down.

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