|By PR Newswire||
|September 10, 2012 11:12 AM EDT||
CHESTER, England, September 10, 2012 /PRNewswire/ --
- Savers could miss out on almost £500 by failing to check when their bond expires
- Failure to act to a maturity notification could see savings tied up into another bond or low interest savings account
Savers whose fixed rate bonds are due to mature should be prepared to look for new options to maximise their saving pots, according to analysis from MoneySupermarket.com.
Britain's number one comparison site shows savers could miss out on over £477** if they fail to switch products once their fixed rate bond expires. MoneySupermarket looked at the interest across a number of bonds both during their term and once expired, and calculated the interest that could be saved by switching to find a better deal. For example, for someone who invested £15,000 in Cheshire Building Society's market leading one-year fixed rate bond in 2011, the interest earned during year one will be £526.50 on an AER of 3.51 per cent. However, if they opt to renew into the current Cheshire Building Society one year savings bond which pays 2.50 per cent AER, they will earn only £375 in interest over the next year.
Yet by switching to a more competitive rate this Autumn, such as State Bank of India's one year fixed rate bond with an AER of 3.33 per cent, someone could achieve £499.50 in interest on maturity next year.
Kevin Mountford, head of banking at MoneySupermarket said: "Five years on from the start of the financial crisis, savers will have continued to struggle against a low interest rate, combined with the eroding effect of high inflation, which has made it difficult to gain a positive real return on savings. However, this means that consumers should make the most of every opportunity to act and take advantage of strong rates once bonds mature.
"Autumn has traditionally been a peak period for people renewing fixed rate bonds and many savers will be seeing their bonds reach maturity over the next two or three months. The fixed rate bonds that are currently available represent a great way of maximising returns as long as savers can afford to lock their money away for the term, and remember to check when the term matures. Our analysis shows a significant amount can be saved simply by shopping around for a better deal, so it really pays to be alert.
"Being vigilant and writing a reminder in the diary is important as savers can't always rely on their bank to remind them their product term has come to end. Some providers will automatically enrol you into another bond if you fail to respond to any maturity notification or fail to act, locking away your savings for the term of the product, or they could be placed in an account paying a low rate of interest.
"It's important to remember that once the bond reaches maturity, the product has served its purpose, it's time to get online, shop around and switch to a more competitive deal. Savers need to be quick as some of the best products may not be available for long."
Notes to editors
*Fixed rate bond Comparison - based on £15,000
** For example, someone who did not switch from the Aldermore fixed rate account reaching maturity this October would receive an AER of only 0.15% after maturity, or £22.50. State Bank of India's one year fixed rate bond with an AER of 3.33 per cent could achieve £499.50, a difference of £477.
Table to show fixed rate bonds 2012 as at 10th September 2012
Account (Terms & Conditions Provider Apply) Term Minimum Deposit AER State Bank of India Fixed Deposit 1 Year GBP10,000 3.33% Select Gold Close Brothers Fixed Account 1 Year GBP10,000 3.30% Fixed Term UBL Deposit 1 Year GBP2,000 3.25% Growth Bond Post Office Issue 18 1 Year GBP500 3.25% Fixed Rate Aldermore Account 1 Year GBP1,000 3.25% Average 3.30%
Provider AER after maturity Interest on maturity State Bank of India N/A GBP499.50 Close Brothers N/A GBP495.00 UBL N/A GBP487.50 Post Office 0.10% GBP487.50 Aldermore N/A GBP487.50
Sourced on 10.09.2012 by MoneySupermarket.com
Table to show fixed rate bonds 2011 as at 3rd October 2011
Account (Terms & Conditions Provider Apply) Term Minimum Deposit AER Cheshire BS Fixed Rate Bond 1 Year GBP100 3.51% United National Bank Fixed Deposit Account 1 Year GBP2,500 3.51% Aldermore Fixed Rate Account 1 Year GBP1,000 3.46% Skipton BS Fixed Rate E-Bond 1 Year GBP500 3.45% Post Office Online Bond Issue 5 1 Year GBP500 3.41% Average 3.47%
Interest Interest on after Provider AER after maturity maturity maturity Difference Cheshire BS N/A GBP526.50 N/A N/A United National Bank N/A GBP526.50 N/A N/A Aldermore 0.15% GBP519.00 GBP22.50 GBP496.50 Skipton BS 0.50% GBP517.50 GBP75.00 GBP442.50 Post Office 0.80% GBP511.50 GBP120.00 GBP391.50
Sourced on 03.10.2011 by MoneySupermarket.com
MoneySupermarket.com compares (at 30th August 2012)
- 107 car insurance providers and 82 home insurance providers
- 12 broadband providers and 18 energy providers
- 32 unsecured loan and 6 secured loan providers
- 62 mortgage lenders and 28 credit card providers
- 66 savings providers and 37 current account providers.
- Over 1,200,000 mobile phone deals
We help our customers to save money on all of their household bills by providing a free, easy to use online service so they can compare a wide range of products in one place and find the product most suited to their needs. Our size means we are able to offer our customers exclusive, market-leading deals, including some they can't even get direct from providers.
By having considerable volumes of informed customers actively looking for products and ready to purchase, we offer our providers an efficient and cost effective customer acquisition solution across all of our channels. This enables our providers to target their marketing spend in an effective and completely measurable way.
Our revenue comes predominantly from fees paid to us by product providers when a customer clicks through to their website and actually applies for or purchases a product. It is a success based marketing fee.
Our customer commitment
- We make it easy to find the brands you expect to see
- We strive to ensure a product cannot be found cheaper by going direct
- We let you remain in control of your personal data
- We are independent and impartial
- We make it easy to switch and save
- We strive to always show the most competitive product available
For further information please contact:
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