Abbey National is launching a new three year fixed rate bond and hiking the interest rates on its range of "Choices Bonds."
The new Fixed Rate Reserve Bond 3 has a minimum investment of £2,000. The limited edition bond is paying 6.85 per cent gross until its maturity on November 1, 2001.
Because the bond is aimed at attracting new money into the bank, the account stipulates that at least 50 per cent of the investment must come from outside of Abbey National.
The Abbey is also hiking up the interest rates on its Choices range of one, two, three and four year fixed rate bonds by an average of 0.25 per cent. Investors with £1,000 can now earn up to 6 per cent gross for terms of two, three or four years.
Abbey National director of savings Janet Connor says: "We are constantly getting feedback from our branches that customers are looking to use bonds to get high returns on their savings and our bond range will certainly meet the needs of these customers."