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09/11/2009Northern Rock Launches New Stepped Fixed Rate Bond Issues

Please Note: This article pre-dates the company restructure of 01 January 2010

• Choose from a three year or a five year bond
• Fixed rates of interest which increase year on year
• 4.25% gross p.a. fixed in Year 1
• 4.50% gross p.a. fixed in Year 2
• 5.00% gross p.a. fixed in Year 3
• 5.50% gross p.a. fixed in Year 4
• 6.00% gross p.a. fixed in Year 5

Northern Rock is launching new issues of its Stepped Fixed Rate Bonds, offering competitive rates for a minimum deposit of £1. Stepped Fixed Rate Bonds (Issues 7 & 8), offer increasing interest rates, each of which are fixed for a 12 month period and will be available to open from today, Monday 9 November, 2009.

The two new limited issue Stepped Fixed Rate Bonds (Issues 7 & 8) offer guaranteed returns at competitive rates; starting at 4.25% gross p.a. for Year 1, and rising to 5.00% over three years (Issue 7) or to 6.00% over five years (Issue 8). Account holders can choose to have their interest paid annually or monthly (the monthly rate is 0.30% below the gross annual rate).

The two new limited issue Fixed Rate Bonds can be opened either by post or through Northern Rock branches and additional deposits can be made during the offer period up to a maximum of £2 million.

Should the need arise, funds can be withdrawn from Issues 7 and 8 during the fixed rate period. A charge equivalent to 120 and 180 days’ gross interest on the amount withdrawn will apply to the three and five year bonds respectively.

In keeping with Northern Rock’s commitment to providing openness, transparency, and fair treatment of customers, full product details are available on application in the Terms and Conditions.

• Information packs can be obtained by telephoning 0845 600 4466
• Further product details and application forms are also available on Northern Rock’s website www.northernrock.co.uk/savings

Interest can be paid annually on 30 November. Alternatively, interest can be paid monthly on the last day of the month (available first business day of the following month). Transfers to the bonds are allowed without charge from all Northern Rock variable rate notice and no-notice accounts.

Upon maturity of the bonds on 1 February 2013 (Issue 7) or 1 February 2015 (Issue 8), accounts will become no notice accounts and customers will be notified of the interest rate. Both bonds are limited issues, which will be withdrawn without notice once fully subscribed.

Northern Rock Savings Pledge
Northern Rock’s Savings Pledge continues to ensure that its savers are kept fully informed of any changes to their accounts. Northern Rock writes to its savers every time it changes the interest rate on their account. In addition, if the account is a notice account and rates are to be reduced, the advance notice will be at least the same as the notice period.

Northern Rock’s New Stepped Fixed Rate Bonds

Withdrawals before maturity subject to a charge equivalent to 120 days’ loss of gross interest on the amount withdrawn.

Withdrawals before maturity subject to a charge equivalent to 180 days’ loss of gross interest on the amount withdrawn.

*AER stands for Annual Equivalent Rate and shows what the interest rate would be when interest is paid and added to the capital balance each year.