SEVENTH HEAVEN: INTEREST RATES ON HOLD, BUT SAVERS CAN STILL GET OVER 7% RETURNS

• MPC announces interest rates will remain on hold at 0.5%
• Savers can avoid poor savings rates by investing in the Innis & Gunn BeerBond™ offering an interest rate of 7.25% gross interest in cash p.a for investments from £500

Following the news that interest rates have remained at their historic low after the Monetary Policy Committee (MPC) voted today in favour of keeping the base rate at 0.5%, savers are being reminded that they can still generate returns in excess of 7% by avoiding low interest savings accounts and high street savings bonds and opt instead for non-traditional investments such as a mini-bond.
At present, with the Pensioner Bond no longer available and three-year premium bonds returning just 2.55%, the opportunities available to savers are limited and offer slim pickings. In many cases, the interest rate on their accounts has been 0.5% or lower – the same as the Bank of England’s base rate. The best notice account (120 days) pays 1.86% and the best four year and over savings bond is just 3.3%. ⁽¹⁾
In comparison, for a limited time savers could opt to invest at a higher rate through a mini-bond. Independent craft brewer, Innis & Gunn, last month launched its ‘BeerBond’^TM, a four-year, initial fixed-term mini-bond offering an interest rate of 7.25% gross interest per annum for investments from £500.⁽²⁾
David Cockburn, Chief Finance Officer at Innis & Gunn, said: “Savers have had to live with low interest rates on their savings for over six years and all signs point to interest rates remaining low for at least another year. Even when they do start to rise, the Governor of the Bank of England has indicated that they are unlikely to rise quickly.
“Cash savings are no longer generating the returns that people want to see for their hard work and patience is running thin as there have been few alternatives available to them until now. Our mini-bond gives savers a new option, one that can offer higher returns than most cash deposit accounts.
“The silver lining for cash savers is that inflation is currently at rock bottom, but this won’t remain the case over the long-term. The MPC is being challenged to take inflation back up to its 2% target, which will immediately mean that for many savers who are keeping their money in lower paying savings account, they might start to lose money in real terms.”
As an alternative to (or in addition to) the BeerBond^TM, investors can opt for the BeerBucks BeerBond™, which offers an equivalent of 9% gross interest rate per annum, with the return taken in the form of ‘BeerBucks’, which can be redeemed against beer at the Innis & Gunn online shop.
Since its foundation in 2003, Innis & Gunn has grown to become a highly successful international business, with an annual turnover of £11.8 million in 2014 – up from £10.5 million in 2013. Last year Innis & Gunn sold over 20 million bottles of beer and is the second biggest supplier of craft beer to the UK off-trade⁽³⁾.
For further details, or to apply for the BeerBond^TM, please visit www.innisandgunnbeerbond.com.