AA Bond pays me 5.15% fixed to 2014, and only 90 day interest penalty to withdraw
I opened this 5 year AA Bond in 2009 at a fixed 5.15% for 5 years. The clincher for me was that the money could be withdrawn, in full or just in part, at any time with a relatively small penalty - of just 90 days loss-of-interest. Taking the withdrawal penalty into account, I estimated that if I withdrew it all after 1 year, I still would have had an effective interest rate of 3.9%, and if I withdrew after 2 years, an effective rate of 4.5%. So I can expect above 4.5% if I were to cash-in now, as I have held it for about 2.5 years.
This was a limited issue, and you have to be ready with any spare cash you might have, if you wish to take advantage of such offers!
I have found it well worth keeping an eye out for such deals - I try to look out for such offers on the comparison websites every couple of weeks, including of course the money.co.uk website !
Good 5.15% interest for 5 years, with withdrawal option