Two more fixed rate bonds join best buy tables

A brace of fixed rate bonds have emerged, topping the two year best buy tables with their 4 per cent interest rates.

Both the Islamic Bank of Britain and Nottingham Building Society have launched their high interest savings accounts, sharing the limelight with each other.  The current leader of the two-year fix best buy tables, Santander subsidiary internet financial service provider Cahoot, just barely edges out the two newcomers with its 4.1 per cent rate.

Customers can open the Nottingham BS two-year fix with a minimum £500 deposit.  An online-only account, the building society christened the new offering its  eSaver Fixed, which will return 3.2 per cent after taxes.

The other new offering, which has been launched by the Islamic Bank of Britain requires a minimum deposit of £1,000.  The bank, which has been a pioneer for its role in bringing UK banking into compliance with Sharia law, offers its services to all faiths in addition to the Muslim community.

The Sharia-compliant bank, which is barred from lending in return for interest unless under strict guidelines, refers not to an ‘interest’ rate of 4 per cent but as an expected rate of profit.  The bank plans to invest savers’ cash directly into mortgages specifically adapted to conform to Sharia law.

Legally bound to pay out on its expected profit rate, IBB has always done so since the bank was founded in 2004.  Fully regulated by the FSA and a participant in the Financial Services Compensation scheme, the banking provider protects the first £85,000 of savers’ deposits in the event of a bank failure.

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