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Leeds Building Society

Type: Fixed-rate bond.

Description: Leeds Building Society has launched a two-year fixed rate Escalator Bond paying a rising return of 7 per cent in the second year.

Conditions: Savers can access 25 per cent of the initial amount invested in the first year, without notice or penalty, and have unlimited access to the full balance at any time in the second year while receiving 7 per cent fixed. The account pays a guaranteed return of 6 per cent in the first year followed by 7 per cent. There is also a monthly interest version for customers who require an income paying 5.75 per cent in the first year, rising to 6.75 per cent in the second year. The minimum investment is £5000 and the maximum investment is £1m, or £2m for joint accounts. One withdrawal of up to 25 per cent of the initial capital invested prior to 1 July 2009. There is full instant access from 2 July 2009, until maturity on 1 July 2010.

Contact: 08450 540 995.

Verdict: Looking at the rates offered, this product aims to pull in the investors with the 7 per cent return in the second year. But with a guaranteed rate of 6 per cent – or 5.75 per cent monthly – in the first year, this does not really make it market leading in comparison to other fixed rate bonds. The minimum investment of £5000 and maximum investment at £1m puts this product at mid range, rather than high net worth investors. Also, it is a bonus to have full instant access after the first year, but again, investors should the one withdrawal policy of up to 25 per cent.

Rating: 3/5