GE Direct launches 18-month fixed rate savings bond paying 2.9%

Rebecca Rutt
by Lovemoney Staff Rebecca Rutt on 14 November 2012  |  Comments 5 comments

Savings rates on short-term accounts have been falling across the market, so should you be investing your cash for a longer period?

GE Direct launches 18-month fixed rate savings bond paying 2.9%

 GE Capital Direct (GE) has launched a market-leading 18-month savings bond paying 2.9%.

In an environment of high inflation and a rock bottom base rate, a savings account paying a decent rate is hard to come by.

So that’s why this new deal from GE looks competitive, though it will only suit people who are able to lock their money away for the duration of the bond.

The deal

Anyone can open this account with GE, which is suitable for those saving over the medium term.

To open it, you’ll need to deposit at least £1,000 and you won’t be able to add or withdraw from this account for the 18-month term.

GE's bond is offering the top rate of interest on accounts of this length, though unfortunately that's not saying a lot - there aren't a great deal of other accounts to compare it with.

Next in line is an account from Metro Bank which pays 2.75% on an opening deposit of £500, joint with a Sharia-compliant account from Bank of London and the Middle East at the same rate but with a hefty £25,000 opening deposit.

After these two, rates drop significantly to the Barclays 2.35% account which you can open with £1.

One-year accounts

For those savers who need access to their cash sooner, but not instantly, a one-year bond is a better option. That’s because you’ll get a slightly higher rate of interest.

There are four accounts paying 3% at the moment from FirstSave, State Bank of India and Shawbrook Bank. These vary in the amount you need to deposit as can be seen in the table below.

The best one-year fixed rate bonds

Account

Rate

Opening deposit

FirstSave: One Year Fixed Rate Bond Issue 22

3%

£1,000

State Bank of India: Hi Return Fixed Deposit

3%

£1,000

Shawbrook Bank: One Year Fixed Rate Bond Issue Three

3%

£5,000

FirstSave Postal: One Year Fixed Rate Bond

3%

£25,000

ICICI Bank UK: Fixed Rate Account

2.85%

£1,000

Two-year fixed rate bonds

If you’re happy putting your money away for two years, the rates on offer are even more attractive.

There's State Bank of India for example offering a rate of 3.5% if you put away £1,000 followed by 3.03% from Islamic Bank of Britain and 3% from Tesco.

These pay quite a bit more and you only need to lock the cash away for six extra months compared to the GE bond to benefit.

The best two-year fixed rate bonds

Account

Rate

Opening deposit

Access

State Bank of India: Hi Return Fixed Deposit

3.5%

£1,000

Branch, post

Islamic Bank of Britain: Sharia’s compliant Fixed Term Deposit

3.03%

£1,000

Online, phone, branch, post

Tesco Bank: Fixed Rate Saver

3%

£2,000

Online, phone

Shawbrook Bank: Two Year Fixed Rate Bond Issue Two

3%

 

Online (opening), phone, post

Chorley & District: Two Year Tracker Bond Issue One

3%

£1,000

Branch, postal

What are the other options?

In the first instance a cash ISA is generally the best option for savers as any interest you make is tax free, up to the limit of £5,640 for this year.

In the instant access market things are pretty dire at the moment. Rates have been plummeting for quite some time and it’s now tough to find a rate above 2.5%.

Right now the top account comes from the West Brom BS and pays a measly 2.52%. After that there are two accounts from Derbyshire Building Society, at 2.5% on a deposit of £1,000 and Nationwide Building Society at the same rate.

These accounts work if you need instant access to your money, without any withdrawal penalties, but the rates are not particularly tempting as you can see from our comparison tables. Read Is there any point opening an easy access savings account? for more.

More on savings:

The top telephone and branch-based savings accounts

The best instant-access savings accounts

Yorkshire launches savings account that helps the RSPCA

Asda shoppers could earn 12.9% interest on their savings

Enjoyed this? Show it some love

Twitter
General

Comments (5)

  • Mike10613
    Love rating 626
    Mike10613 said

    2.9% wow! The average saver in the UK would get about eighty quid a year on their savings. Enough for a decent meal for two in some places.

    Report on 15 November 2012  |  Love thisLove  0 loves
  • coloratura
    Love rating 81
    coloratura said

    The banks are playing us for fools. They have waited until people have got older and have amassed a reasonable amount of savings forour old age and now we get next to nothing in savings whilst they charge high interest rates to borrowers, won't lend to small businesses to encourage growth and are now so arrogant that when I went into my Lloyds (soon to be Co-operative) bank recently at around 1-00 p.m. (the only time available to me that day) to deposit quite a large number of cheques, I was told that I shouldn't go in at lunchtime as they were "busy" (there was only one assistant at the counter). I had previuously gone in around 2-00 p.m. and had been told the same (there was only one assistant at the counter that time with the so-called manageress "taking a delivery"). The result of the second visit was that the customers who had to wait were blaming me and "harrassing" me to hurry up. And there was me thinking that (1) it is the banks responsibility to see that they have enough staff to deal with any rather long deposits and to cover busy times such as lunchtime (2) to try and arrange their deliveries not to coincide with obviously busy times (3) to be polite to customers (which they weren't) (4) to allow customers to enter their premises to deposit or withdraw money between the times stated on their door outside - all of which I did. At no time did I discuss the weather or my Christmas list so as not to keep people waiting - yet I was the one supposedly at fault. Perhaps next time I have a lot of cheques to deposit I should go in 5 minutes before they are due to close .....after all it wonlt be a busy lunchtime. A copy of the gist of what I have put here will go to the CEO of Lloyds and perhaps David Cameron would like a copy also. Personally, I think we should all choose a day and all take 10% of our savings out of the banks just to remind them that it is our money they are giving us next to nothing for (and if they can't even bother to be polite maybe we should move our money elsewhere. The Banl of Dave in Skipton might be worth a small deposit. By the way - in order to have saving I have worked for 46 years nursing my husband and parents through terminal illnesses on the way (the same as many other people) so I think that I at least deserve politeness.

    Report on 16 November 2012  |  Love thisLove  2 loves
  • Getshutofgordon
    Love rating 8
    Getshutofgordon said

    Aren't the falling rates due to the government making cheap loans available to the banks to try and encourage them to lend to small businesses? So now they don't need savers money anymore!

    Don't these politicians have any brains between them. Or maybe they aren't so daft as lower interest rates mean the country's debts are cheaper.

    Nevertheless it's less money in savers and particularly pensioners pockets who rely for their income on interest on their savings. So they have less disposable income which further damages the economy which means small businesses won't have business to support the loans.

    Meanwhile the banks continue to strengthen their balance sheets and continue to grab their fancy bonuses all at our expense.

    Where is the justice, is all business corrupt, banks, utility companies running cartels, foreign based companies avoiding UK corporation tax, all the main utilities are foreign so all this extra profit they are making is no doubt leaving these shores.

    We kid ourselves with renewable energy another cash generator for these companies and wealthy landowners. Again all this subsidy(well actually we subsidise it through our bills) is draining overseas, politicians jumping on every gravy train available, few have life experience having come out of uni with degrees in politics and couldn't run the preverbal p*ss up in a brewery!

    Just how long are we going to put up with this lunacy?

    Report on 16 November 2012  |  Love thisLove  2 loves
  • celticlass
    Love rating 9
    celticlass said

    save some money in Tesco Christmas saver and get 6%...yes a whopping 6%!! Ok the amount you can save is paltry but it could help for an expensive time of year!!!

    Report on 19 November 2012  |  Love thisLove  0 loves
  • nickpike
    Love rating 309
    nickpike said

    These low interest rate have generated a fake economy, and some weird things are happening. The banks don't need our money as they can borrow in bulk cheap. Even something obscure like the MPs expenses scandal was/is based on property prices caused by low interest rates. We need interest rates back to normal.

    Wave bye bye to the value of your savings, and this government couldn't care a dam'n. Mind you, you can also wave bre bye to the value of assets as prices fall.

    Report on 20 November 2012  |  Love thisLove  0 loves

Post a comment

Sign in or register to post a reply.

Our top deals

Provider & account name AER/Gross Interest paid Apply
now

GE Capital Direct
GE Saver Issue 6

1.10% /
1.10%
Anniversary Apply

Scottish Widows Bank
Direct Transfer Account 2

1.00% /
1.00%
Anniversary Apply

NatWest
Instant Saver

0.50% /
0.50%
Quarterly Apply
W3C  Thank you for using One Flew Over the Cuckoo's Nest