Survey-Make Your Money Grow: Lock up your savings

If you are looking for a low-risk home for your money, a walk down the high street is an easy way to start. We asked several high street banks and building societies what they had to offer someone with pounds 5,000 to invest for 10 years, but who does not want to take risks.

Barclays offers a wide variety of choices, starting with a 90-day savings account which currently pays 3.9 per cent gross, or 3.12 per cent net.

Since you can lock up your money for at least five years, the branch may suggest its variable-rate Tessa (tax-exempt savings account) which pays 6 per cent. The snag with a Tessa is that you can deposit only pounds 3,000 in the first year.

Alternatively, there is Barclays' guaranteed equity savings bond. The minimum investment is pounds 2,000 and interest is based on the performance of the stock market. The bond matches the growth in the FT-SE 100 index. If the FT-SE 100 grows by less than 30 per cent, your bond will still pay 30 per cent interest. So with a pounds 5,000 investment, the minimum sum at maturity will be pounds 6,500 gross, pounds 6,200 net.

Another option is Barclays guaranteed PEP. Your money goes into a unit trust which invests in the top 100 companies on the stock market. If this investment falls, you are guaranteed the return of your capital in full at the end of five years.

Bradford & Bingley offers an easy solution: the society's top-paying Bonus 120 account requires a minimum investment of pounds 5,000 and - providing there is no more than one withdrawal a year - pays 5.4 per cent gross a year, 4.32 per cent net. Alternatively, you could invest pounds 2,500 in B&B's Classic Tessa which currently pays 5.55 per cent, and the remaining pounds 2,500 in a Special Asset account. With a minimum investment of pounds 2,500, this pays 3.3 per cent gross a year, 2.64 per cent net.

Lloyds Bank offers a variable-rate Tessa which currently pays 6.5 per cent, but more interesting are its five-year bonds, each requiring a minimum investment of pounds 2,000.

The Guaranteed Bond pays annual interest of 5.25 per cent gross, 4.2 per cent net, and your capital is returned in full on maturity.

Interest payments on the Premier Classic bond are linked to the performance of the stock market, with investors receiving 105 per cent of any growth in the FT-SE index over the five-year term. If the index should fall, you are guaranteed the return of your capital at maturity.

In addition to its deposit accounts and Tessas, Nationwide Building Society also offers a fixed monthly income bond which pays 7.4 per cent for five years, while its fixed-growth bond pays 6 per cent in the first year, then 6.5 per cent, rising to 10.0 per cent in the fifth.

But if you don't know what you would do with the money in five years, there are some things you could spend it on sooner. If you decide to splash out on a memorable millennium bash, then head for the Coventry Building Society. Put the money in Coventry's fixed-rate bond which pays 7.3 per cent gross, 5.84 per cent net, and matures at the end of November 1999 - just in time for the celebrationn

Abigail Montrose