Leeds Inflation Buster Bond is highly rated

Leeds Building Society’s new Inflation Buster Bond, which has proved extremely popular with customers looking for a real return from their savings, is also highly rated by leading independent financial comparison site, Moneyfacts.co.uk.

The Bond is guaranteed to beat inflation by 3.00% and any early investment, prior to strike date on 1 December 2007, will receive interest equivalent to the Bank of England Base Rate credited on 30 November.

Andrew Hagger of Moneyfacts.co.uk said, "It is good to see Leeds Building Society continuing to compete with National Savings and Investments in what is a very limited market. With RPI currently at 4.1% (August 2007), this could compete well with the current 2 year market leader of 6.75%. Clients will need to be aware that economic conditions will play a major part in deciding their final return. We have given this four stars out of five1."

Paul Riley, Head of Group Treasury said, "The demand from customers for this bond has been strong and, as a result, we have launched a third issue. The annual change in RPI in August saw an increase on the previous month. This product provides excellent peace of mind with the inflation link, so no matter what happens, customers will receive a guaranteed real return.

"Customers also have the flexibility to operate this bond at any of our 70 branches or by post. I believe this as an excellent addition to any investor’s portfolio."

The return is linked to the Retail Price Index (RPI), which is the official measure of how much goods and services bought by an average UK household changes. Items measured by the RPI include food, clothing, education and child care, council tax, heating and lighting and mortgage interest payments.

The inflation rate is the percentage difference between RPI on two dates. So, if the RPI in August is 207.30 and the following August is 215.74, then the percentage change in RPI and the inflation rate over the period is 4.07%. In this scenario, inflation is 4.07% and Leeds Building Society’s Inflation Buster Bond would pay a return of 7.07%.

For more information, visit leedsbuildingsociety.co.uk.