New savings account launched with interest linked to inflation

Posted on February 3rd, 2011 | Categories - Savings

With interest rates still at an all time low and inflation rising, savers have faced a tough time over recent months.

Since the withdrawal of National Savings & Investments (NS&I) Index Linked Certificates last year accounts which provide an interest rate equal to inflation have been few and far between.

However, January sees the launch of the ‘5 year inflation rate bond (issue 1)’ by Birmingham Midshires.

The account has a term of five years, with no withdrawals allowed, and interest is linked to RPI (Retail Price Index) with an additional fixed rate of 0.25% gross payable.

For some savers this account could provide the answer to inflation linked returns, however as always there are advantages and disadvantages to be considered.

Read more about the features and benefits of this account by clicking here .