Bond rates falling

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Andrew Feinberg

White House Correspondent

MOST insurance companies have cut rates on guaranteed income bonds this week after the base rate cut on 16 October.

So rates of 7 per cent plus are now thin on the ground and unlikely to last long. Cornhill Life still had a bond on sale yesterday paying 7 per cent on a minimum of pounds 1,000 for five years.

Rates on savings accounts have yet to settle. Barclays Bank and Lloyds Bank both announced new Tessa rates of 7.5 per cent this week, so Allied Trust Bank's deal looks attractive.

Darlington Building Society is still paying 11 per cent on a Tessa with a minimum deposit of pounds 1 and National Counties is paying 10.5 per cent on a minimum of pounds 3,000.

But these rates could change.