BM Savings launches new Inflation Rate Bonds and ISAs

Following the launch of the extremely popular three and five year Inflation Rate Bonds and ISAs earlier this year, BM Savings today launched two new Inflation Rate Bonds and Inflation Rate ISAs, with the option of a three year or five year term.

The Bonds and ISAs track annual inflation as measured by the Retail Prices Index (RPI) whilst also offering a fixed interest rate on any balances - of 0.50% AER/Gross/Tax Free on the five year term or 0.25% AER/Gross/Tax Free on the three year term.

Official figures released by the Office of National Statistics (ONS) shows that annual inflation for the Retail Prices Index (RPI) has reach 5.2% in August. RPI tracks the cost of a variety of household goods from travel to telephones, fuel to food and over the last five years, consumers have seen a rise in the cost of basic every day items.

John Bianco, Head of BM Savings said: "Since their launch in January 2011, we are very pleased to be able to continue to offer our very popular Inflation Rate accounts and are committed to offering accounts that help savers limit the impact of inflation on their savings pots. We are very proud to be the only provider offering a range of fixed rate Bonds and ISAs which offer customers the opportunity to limit the impact of inflation on their savings."

Inflation Rate Bonds and Inflation Rate ISAs Key Features:

Interest Calculations

The annual rate of gross interest is calculated using the Retail Prices Index Annual Inflation Rate*
As well as the interest rate linked to RPI, savers will also receive an additional fixed rate of interest - 0.50% AER/Gross/Tax Free on the five year term or 0.25% AER/Gross/Tax Free on the three year term.
Interest is paid on the start date 19th December 2011.
The RPI inflation rate will be taken from the October prior to the annual interest payment.
Interest can be capitalised or paid into a nominated bank account.
All customers will be notified of the rate which has been applied and the amount of interest paid within 14 days after the payment has been made.
Capital is protected so savers will still receive their original deposit plus the fixed rate of interest even if deflation occurs.

Other Features:

The start date is19th December 2011.
Minimum deposit is £500.
Maximum deposit if £1million.
Unlimited deposits during the offer period up to the annual limit for the tax year (£5,340) (as long as the issue remains open).
Can be opened by phone or by post.
Additional deposits can only be made during the offer period (as long as the issue remains open)
Withdrawals are subject to a 5% charge and no interest will be applied to the amount withdrawn if the funds are no longer in the account on the Interest Payment Date.
Three year bonds mature on19thDecember2014.
Five year bonds mature on19th December 2016.
Transfers in of current and or/previous years ISA funds accepted

Offer period

The offer period runs from7thOctober 2011 to 2nd December 2011
The start date of the bond is19th December 2011
From the opening date until the start date, all funds invested will earn a fixed interest rate of 0.50% Interest earned during this period will be paid on19th December 2011
Customers have a 14 day cancellation period in which to close their account. This runs from the date the customers cheque is credited to their account.

For more information, visit bmsavings.co.uk.