First Direct Bond

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The privilege of having a First Direct Bond is only for First Direct customers.

According to Matt Colebrook, Chief Executive at First Direct, since customers wanted the assurance of earning a consistently good rate of interest, First Direct was launching the Fixed Rate Savings Bond.

The First Direct Bond must be opened via the telephone.

The First Direct bond carries huge benefits and returns on investment. The bond offers a competitive rate of 2.80% AER (2.80% GROSS p.a.) at maturity on the 30September, 2011.  (This rate is available only till 30 September 2010). Customers can invest any amount of money between GBP 2000 and GBP  49,999 pounds.. While extra bonds can be opened, payments cannot be made into a bond once it is opened. Further, no withdrawals are allowed during the whole term of the bond. However, in case the customer has need of this money, he is entitled to the accrued interest, but will have to pay a penalty of GBP 100.

Some features of the First direct Bond

First Direct Bond, as the name suggests means that you deposit a fixed amount of money at a  fixed interest rate for a specific time period.  The rate of interest remains the same for the whole term. At the end of the fixed time  period, you will get back the initial amount deposited.  The interest is paid on  maturity of the bond.

One condition for having a First Direct Bond, is that you are required to have another First Direct account with the bank other than an ISA or a  Regular Saver. This other account must be maintained for the length of the term of the bond.

You can view your transaction details via Internet banking. You can also manage it through the telephone.

Being a banking product, a new bond will be released each month. Interest rates of these may vary.. Naturally, your application details must reach First Direct before the issue’s starting date, for effective processing. The maturity dates are specific to each issue.

Interest will be paid in  after deduction of basic income tax, unless there is documentation to prove your eligibility in some other category. . If you belong to a higher rate tax payer category, you may have to pay an additional tax to HM Revenue and Customs.

A point to note is that there are no bonus payments on the First Direct Bond.

 

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