United Trust Bank Tracker Bonds

Written by Karen Bryan

united trust bankUpdate 8 February 2016 – The rate paid on the United Trust Bank Tracker Bonds has dropped again. The two-year tracker now pays 1.9%, tracking at 1.4% above the Bank of England Base Rate. The three-year tracker now pays 2.1%, tracking at 1.6% above Base Rate.

Update 18 January 2016 – I noticed that the rate of interest paid on the United Trust Bank Tracker Bonds has dropped by 0.2%. The two-year tracker now pays 2.1%, tracking at 1.6% above the Bank of England Base Rate. The three-year tracker now pays 2.4%, tracking at 1.9% above the base rate.

The United Trust Bank Tracker Bonds look like competitive savings options, if you are willing to tie up your cash.

The United Trust Bank Two Year Tracker Bond pays 1.75% above the Bank of England Base Rate (currently 0.5%), so this equates to an interest rate of 2.25%. The highest rate two-year fixed bond I could find from Axis Bank pays 2.27%.

The United Trust Bank Three Year Tracker Bond pays 2.1% above the Bank of England Base Rate, equating to a current  rate of interest of 2.6% The highest rate three-year fixed rate bond I could find, again from Axis Bank, pays 2.55%.

The minimum deposit for both tracker bonds is £500. Deposits of up to £75,000 per person with the United Trust Bank are covered by the Financial Services Compensation Scheme.

Given the assumption that UK base rates will rise in the next couple of years, the United Trust Bank tracker bonds look attractive, as the interest rates offered are very similar to the highest fixed rate savings bonds available on the market. You need to be aware that there is a possibility that the Bank of England base rate could fall, in which case a standard fixed rate bond would be a better buy.

I decided to put some money into a United Trust Bank Three Year Tracker Bond. I was able to open the account online, using my driving licence to verify my identity. As soon as the account was open, I could make an electronic transfer into the tracker bond. There is a 14 day period from the date of opening the account for funding.

Rates of interest correct on 12 January 2016.