Santander bond

Santander

Type: fixed-rate bond

Description: Santander has launched a new range of fixed-rate bonds, including a two-year fixed rate paying up to 3.70 per cent AER. Investors can choose between a one or two-year bond and there are three investment tiers available of £500, £5000 and £25,000. For the one-year bond the rates offered for each tier are 2.5 per cent, 3 per cent and 3.2 per cent AER respectively. For the two-year bond the rates are 3.2 per cent, 3.4 per cent and 3.7 per cent AER respectively.

Conditions: Early closures or withdrawals are not permitted until maturity. Minimum investment is £500. Accounts can be opened online, on the telephone or at any branch.

Contact: www.santander.co.uk, the savings hotline is 0800 234 6065.

Verdict: Alister Mellor, director of Buckinghamshire-based The Financial Management Group, said: “The rates seem fairly competitive although the two-year fixed rate of 3.70 per cent is still well below the current rate of inflation making cash deposits an unattractive proposition for those seeking income.

“Corporate bonds and dividend-yielding equities still remain attractive alternatives as long as the client is prepared to take an element of investment risk.

“Overall we are satisfied with the financial strength of Santander and would be happy to recommend these fixed-rate bonds to those clients seeking the security provided by deposit-based investments.”

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