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Investments in Banks.

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Introduction

MEMORANDOM TO: Miss Booth FROM: Fareeda Begum DATE: 3 March 2003-02-03 Investments in Banks. You have asked me about investing your recent winnings in a bank account or a trust with competitive interest rates. I have collected a wide variety of accounts from different types of banks and alternative ways of saving your money in the best possible way. My findings are below: The Loughborough Building Society Account: Loughborough Bond II Interest rate: 3.68% Net p.a annually for �100,000 or more. Key Features: * 2 year term account. A letter is sent to you advising of re-investment terms shortly before maturity. * Minimum investment �5000 * No withdrawals in year 1 but allowed in year 2 subject to 90 days notice or 90 days interest lost. * Additional amounts can be invested anytime. * Interest paid annually on December 31st or monthly as an income. Lloyds/TSB Account: 90 Day Notice Account Interest rate: 2.32% Net p.a annually for �100,000 or more Key features: * Minimum investment �10,000 * 90 day notice period to access money. * Receive regular statement to keep track of account * Interest can be paid annually or monthly as an income. ...read more.

Middle

* Minimum deposit �2000 * Chose from a 1 year, 2 year of 3 year term investment. * Receive interest annually, monthly, quarterly or the end of term interest option Account: Barclays Variable rate ISA Interest rate: 4.25% gross for �10000 or above Key features * Minimum investment is �10 * Just a cash mini ISA * Interest added annually * Fixed interest rates Investments with the National Savings and Investments, which is backed by HM Treasury who can promise you that your money is 100% secure. You can open these accounts with your local post office. Here are three accounts: Account: Fixed Interest savings Certificates. Interest rate: 5 year fixed interest saving certificate for �10,000 3.05 gross p.a Key Features: * Guaranteed returns, tax free. * Interest rates are fixed for the length of chosen term- 2 year term or 5 year term. * Invest up to �10,000 in each issue bought. Account: Fixed rate saving bonds. Interest rate: 5 year fixed rate term �50,000 or more 4.14% gross 3.32% Net p.a Key features: * Certainty of knowing exactly what your return you will get on your money. ...read more.

Conclusion

The Income Bond with the National Savings and Investment account has a better return monthly than the Natwest account. Income Bonds �40,000 x 3.38%=�1520 annual interest �1520/12 months =�126.67 monthly interest Diamond Reserve �40,000 x 2.28%=�912 annual interest �912/12 months = �76 monthly interest. As you can see the above calculations the Income Bonds are far better investment if you want an account that gives you a monthly income. Total investment Account Terms Gross p.a Net p.a Total out. �10,000 Saving Certificates 5 years 3.05% _ �11620.91 �50,000 Fixed rate saving Bonds 5 years 4.15%p.a 3.32% p.a �58613.76 �100,000 Barclays Saving Bonds 3 years 12.49%(total saving growth) 9.99%(total savings growth) �109990 Above is a table showing accounts which have a fixed term which your investment into and when the investment matures you have the chose to reinvest or take your money out. The Barclays Bond has a high interest rate because it is the total interest you receive after the three years in the account. This graph above shows the increase of the National Savings and Investment accounts. I hope all this information will help you decide your chosen investment account for you to invest �100,000.if you have any inquiries please contact me and I will be glad to help. ...read more.

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