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Low interest rates abound, time for a Windfall?

Water, water everywhere and no a drop to drink, quoted the Ancient Mariner.

Coleridge’s great words were about being left adrift in a small boat with a grand thirst and nothing but the undrinkable sea all around. There seems a parallel in this age’s ultra low interest rate environment. It seems increasingly hard to find anywhere to save your cash with any hope of a decent return.

Interest rates are at all-time lows and don’t really look like they are going anywhere much better soon. This is fine of course, if you have a tracker rate mortgage or a standard variable rate mortgage, but rubbish if you have cash savings.

Wages are stagnating and while the Government has acknowledged that the housing market is beset with issues, it doesn’t really seem to know what to do about it.

And now, joy of joys, we have the news that annual inflation has been calculated as being at its highest for two and a half years.1

The Consumer Price Index reached 1.8 per cent in January, up from December’s 1.6 per cent. This is largely due to the rises of fuel and food, reports the BBC. Oh, that’s all right then.

For investors, the stock market is pushing all-time highs, which you may view as good news – but not if you aren’t prepared to take the risk.

And as if this wasn’t enough for a lousy back-drop for savers, we now learn that Premium Bonds – the nation’s favourite savings vehicle – will cut the number of prizes it offers by more than 5,000, further lowering the already slim chances of winning anything substantial.2

But we like to think we can offer some good news in this desert of bad.

It’s called our Windfall Bond.

The Windfall Bond, which is actually a variable rate notice account, is unique. It’s based on the same principles of generating growth after a qualifying period by way of monthly prize draw but, with odds of winning of 64/1 in the course of the first 12 draws.

The breakdown of the Windfall Bond draw ensures there are 13 opportunities to win each month – which equates to 156 in each calendar year. Compare those odds with the Premium Bond. According to the Premium Bond calculator on moneysavingexpert.com, a holding of £10,000 has a 1/367 chance of winning a £1,000 prize over the course of 12 draws.

Each bond is £10,000 and, unlike Premium Bonds pays interest at a rate that is linked to the Bank of England Bank Rate, currently paying 0.25%. But the draw structure – 10 prizes of £1,000, two of £10,000 and one of £50,000 greatly enhances the chance of an, erm, windfall.

So that’s good news, isn’t it?

Find out more about our Windfall Bond here or call one of our friendly and highly-trained advisers on 03330 140141.

 

1. http://www.bbc.co.uk/news/business-38966692
2. http://www.bbc.co.uk/news/business-38893452

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