The Week Unzipped: Dunfermline launches bond to introduce children to savings habit

Published on Saturday 28 November 2009 12:22

THE Dunfermline Building Society is to launch a competitive child savings bond paying 5 per cent over a four-year term in a bid to encourage youngsters to save.

The bond pays 5 per cent on balances up to 10,000, with interest added either annually or once the product matures. It is available in branches, by post or through telephone banking service Dunfermline Direct.

Young people's spending is worth almost 5 billion to the economy, according to the London School of Economics. The average child spends more than 6,000 between the ages of seven and 15. This sum invested in the Dunfermline's bond would accrue 1,293 in interest over the four-year term.

Account holders must be under 19 when the bond matures or born after 1 February, 1995. The minimum balance is 100 and the maximum 10,000. No withdrawals are allowed.

Christmas pass

CONSUMERS will dig into 3.45bn of their savings this year to cover the costs of their Christmas spending, according to research from Abbey.

A third of people will spend 9 per cent of their year's savings, an average of 221 each, over the festive period.

However, most people plan to curb their Christmas spending this year, with gifts for family and friends the first on the list of cutbacks. A quarter will reduce the amount they spend on socialising at parties and Christmas meals.

Almost one million consumers admit they will return gifts they receive this year in exchange for cash in order to reduce the financial burden of the festive season.

The research revealed that one in five people have no savings whatsoever to fall back on this Christmas.

Home loans rise

MORTGAGE lending to first-time buyers increased north of the Border by 26 per cent in the third quarter of 2009, according to the Council of Mortgage Lenders.

Lenders advanced 471 million to 5,400 Scottish first-time buyers between July and September, up from 4,300 in the previous quarter and unchanged from this time last year.

The number of home mover loans increased by 15 per cent to 8,300, worth a total of 1bn. Overall there was a 19 per cent rise in house purchase loans, to 13,700, though the figure is 10 per cent down on the same three months last year.

Mortgage rate cuts

COVENTRY Building Society has cut its mortgage rates by up to 0.66 per cent.

Headlining the range is a new two-year fixed-rate mortgage at 3.5 per cent with a 50 per cent deposit. There is also an option for customers with a 30 per cent deposit at 3.65 per cent.

The society also offers a two-year tracker that follows base rate plus 2.09 per cent, available with a 30 per cent deposit. Both products offer a free valuation and remortgage transfer service.

100 online bonus

ALLIANCE & Leicester is to re-introduce its 100 bonus for customers who switch to its Premier current account online.

The bonus will be available for two weeks only, from 30 November to 13 December, exclusively to online customers.