News Reader.info

The three-year bond promises to pay the Retail Price Index (RPI) inflation rate, which is currently 5 per cent, and another 0.25 per cent. The five-year bond will pay RPI plus 1 per cent

annually.

This follows the withdrawal last month of similar accounts from National Savings & Investments as well as the Post Office itself.

The bonds are available until January 20, unless they are oversubscribed before this date.

The bond can be opened with £500 and no additional deposits or withdrawals are permitted until the bond matures.

The three-year bond promises to pay the Retail Price Index (RPI) inflation rate, which is currently 5 per cent, and another 0.25 per cent

Ros Altmann, director general at Saga, said: “Inflation is going to remain a huge problem and if you want to protect the buying power of your savings you need to look for ways to do this.

“The Bank of England has been promising that inflation will fall, but there are no signs of this happening. Everyone needs some protection against inflation but it’s hard to find ways to do

so.”

Richard Norman, director of savings and investments at the Post Office, said: “Our bonds have proved hugely popular in the past, so we urge interested savers to get applications in as

quickly as they possibly can.

“We will aim to open bonds for as many applicants as we can, but funds are strictly limited and we may need to withdraw the bond before the official closing date if it is oversubscribed.”

Meanwhile, savers with fixed-rate bonds coming to an end need to look at options for their savings: by letting their cash drift into a low-paying account, they could miss out.

For example, someone who invested £15,000 in Turkish Bank’s one-year fixed-rate bond in 2010 would have earned £435 on an interest rate of 2.9 per cent.

Once this bond matures the rate drops to 0.1 per cent, meaning they could be missing out on £420 in additional interest in year two.Kevin Mountford, head of banking at Moneysupermarket.com,

said: “Savers cannot always rely on their banks to remind them their product term has come to an end so they must be vigilant and go as far as writing it in their diary.

“If you fail to act, some providers will automatically enroll you into another bond, tying your savings up or they will place your money in an account paying a poor rate of interest.”

We use your sign-up to provide content in ways you've consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You

can unsubscribe at any time. Read our Privacy Policy

See today's front and back pages, download the newspaper, order back issues and use the historic Daily Express newspaper archive.