One financial services provider has recently announced it has broadened the number of fixed rate bonds it offers to savers.
Savers have been on the hunt for savings accounts with attractive interest rates since the worldwide banking crisis and Sainsbury’s has recently broadened its selection of fixed rate bonds in an effort to meet the demand of these UK savers.
The personal and business bank account supermarket bank is now offering a new one-year package with a 3.2 per cent gross annual equivalent rate. Sainsbury’s has made the package available to both new customers and its existing ones as well. The new one-year fix can be taken up either over the phone or through online banking.
The new offering from Sainsbury’s offers flexibility to the customer by allowing them to choose whether they receive interest monthly or annually. Additionally, deposits may range from a minimum of £5,000 to a maximum of £50,000.
Sainsbury’s savings head, Helen Cook, commented on the offering by stating that the new one-year fix is ideal for savers in search of a good return over a relatively short time period. Sainsbury’s expect that it will be highly popular.
Industry experts remain sceptical in the face of high inflation rates however. The Consumer Prices Index rose to a new high of 3.7 per cent in December, up from its 3.4 per cent rate the previous month. This leaves the inflation rate at nearly twice the target rate of 2 per cent set by the Bank of England’s Monetary Policy Committee.
Due to the high inflation rates, many experts are counseling against taking out long-term savings products. One industry insider went so far as to suggest that savers would be better off paying down their debt while low UK interest rates persist.