New Series, new higher interest

New Series, new higher interest

Two fresh bond series are launched today, with higher interest rates across the board and more frequent monthly interest payments. Here are the headlines:

REAL Monthly Income Bonds (Series 7)

– 5 year term
– Penalty-free redemption available after thirty months
– 4.90% pa gross interest payable on the last working day each month (5.00% AER)
– Tracks Bank of England base rate between 0.75% and 5.0%, plus 4.4%
– Secured on UK property

Compared with the previous series of Income Bonds we have increased the AER from 4.04% to 5.00% and increased the frequency of interest payments from semi-annual to monthly.

REAL Capital Bonds (Series 8)

– 5 year fixed term
– 2.00% pa gross interest payable monthly
– 35% repayment bonus at maturity
– Monthly interest plus repayment bonus equates to 8.02% AER
– Secured on UK property

Compared with the previous Capital Bond series we have increased the annual rate from 1.5% to 2.0% pa; increased the payment frequency to monthly; and increased the repayment bonus from 33.33% to 35% creating an increase from 7.29% to 8.02% AER.

The new offerings open for investment today; applications received before 29th March 2018 will be treated as if they were received on 1st March ie attracting their full monthly interest instalment on 29th March.

Existing holders of Series 5 (Income Bonds) and Series 6 (Capital Bonds) have the option to continue with their holdings on the existing terms, or to convert into the new series and receive higher interest in return for rebasing the start-date of their investment. Series 5 & 6 bonds are now closed to fresh investment.

Director Alan Bate said, “We hope the monthly interest facility will prove useful for many investors including those with SIPPs and SSAS pensions seeking steady income drawdown. Prospective investors who expect the Bank of England to raise base rate from 0.5% currently will find our new tracking feature particularly attractive, because an increase in Base Rate to 0.75% will immediately trigger a sharp jump in our Monthly Income headline rate to 5.15% pa (5.27% AER).”

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