The Post Office has launched the third issue of its popular Inflation-Linked savings bond.
Its new issue, available to customers from today until Friday January 20, 2012, offers a choice of a three-year fixed-term bond that offers annual RPI inflation rate plus 0.25 percentage points or a five-year fixed bond that offers annual RPI inflation rate plus one percentage point.
Either bond can be opened with a single deposit of £500 up to a maximum of £1m with the return calculated annually and paid at maturity. No additional deposits are permitted and the account cannot be accessed until the end of the fixed term.
The rate of return is based on the annual Retail Price Index (RPI), which includes the cost of mortgage interest payments and has historically run at a higher level than the Consumer Price Index (CPI) rate.
Richard Norman, director of savings and investments at the Post Office, said: "Since we launched the first Inflation Linked Bond earlier this year, inflation has remained high, leaving savers worried about the value of their hard earned cash.
"This new issue of the Inflation Linked Bond offers them another chance to get peace of mind that their savings will be protected against the eroding effects of inflation."
Norman warned this type of bond has proved hugely popular in the past, so urged interested savers to get applications in as quickly as possible.
"We will aim to open bonds for as many applicants as we can, but funds are strictly limited and we may need to withdraw the bond before the official closing date if it is oversubscribed," he said.
Applications must be made by post and application packs can be requested by calling 0800 169 7500 or downloaded online at www.postoffice.co.uk/savings.
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