Moneyfacts: Bond rates are declining

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Moneyfacts: Bond rates are declining

Tue 16th Sep 2008

The "fixed-rate bond boom" is over, according to finance website Moneyfacts.

It said that while fixed-rate bonds were paying "some of the highest rates ever seen" earlier in the year, easing of pressure in the money markets means that rates are now dropping.

While the best buy tables had carried many rates of seven per cent or more, these are now disappearing.

During the last week, Moneyfacts has registered more than 30 changes to fixed-rate bonds, most of which are either product withdrawals or drops in rates.

Some of them are being withdrawn due to being fully subscribed, but others are doing so due to the current climate.

Moneyfacts added that the demise of US investment bank Lehman Brothers might also mean more bonds are withdrawn.

Yesterday, Nationwide announces its fifth issue of the Legal & General Guaranteed Multi-Index Equity Bond.

The six-year deposit-based bond guarantees to protect the original capital with a minimum return of 18 per cent if held until maturity.

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