Press release

Saga Personal Finance offers more to savers

Tuesday 2 October 2007

  • Online savings account interest rate increases to 6.30% AER
  • Launch of new Saga 30 month Trigger Guarantee Equity Bond with the potential for 22% gross return

Saga Personal Finance today announced that it is now giving customers an even wider choice of high-interest savings products, with the new issue of two fixed rate bonds. It is also increasing the interest rate on its online savings account to 6.30% AER*. In addition for those that can tie their money up for slightly longer Saga is launching the 30-Month Trigger Guaranteed Equity Bond.

For customers who are looking to invest their money for a fixed term from 4th October 2007, the 1 year fixed rate bond has a rate of 6.77% gross (6.98% AER*) and the 2 year fixed rate bond has a rate of 6.58% gross (6.76% AER*). These rates are presently some of the best in the market.

Saga's 30 Month Trigger Guaranteed Equity Bond is aimed at investors who are looking for the potential high return from the stock market with no chance of losing any of their capital. This bond is linked to the performance of the FTSE 100 index over a 30 month period but offers a return of 22% gross** (8.24% AER*) providing the average of the FTSE 100 Index has not fallen at the end of the 30 month term***.

In addition to the above products, the Saga online saving account will pay an additional 0.10%, from 4th October 2007 until March 2008, giving a current rate of 6.30% (6.35% AER*), making it one of the most competitive deals on the market. All existing Saga Online Savings Account customers will automatically benefit from this improved rate on their savings.


* Gross is the contractual rate of interest payable before the deduction of income tax at the rate specified by law.

**AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.

We take the daily average of the FTSE 100 Index for the first month of the bond and then compare this to the daily average of the last 3 months of the bond to calculate the FTSE 100 increase. If the average of the last 3 months is greater or equal to the average of first month then the bond will pay the promised return.


* The deposit taker for this account is Birmingham Midshires, a division of Bank of Scotland plc.

* Basic tax will be deducted automatically from the interest paid to the investor.

* You can invest anything from 500 to 5 million.

* The term runs from the end of the offer period (31 December 2007) until the date of maturity (30 June 2010).

* The cost of capital protection is included in the returns offered.

* To assess the FTSE 100 Index performance over the period of the investment, a special averaging feature is used at the start and maturity of the bond.

* Where the account is held in trust or on an enduring Power of Attorney, it is the person operating the account who will need to set up password security.

* We'll take care of the basic rate tax liability for the customer. A higher rate taxpayer may have a further amount to pay. Non-taxpayers can reclaim the tax paid on their behalf simply by contacting their Financial Adviser. Tax rules may change in the future.

* To assess the FTSE 100 Index performance over the period of the investment, we use a special averaging feature at the start and maturity of the bond. This averaging may restrict or improve the return you receive. Averaging is designed to protect the investment not just from any uncharacteristic high FTSE 100 Index fixing at the start date of the bond, but also from a low FTSE 100 Index fixing at the maturity date (30 April 2010), however, the investment return will be restricted if the opposite were true. The aim is to smooth the performance of the FTSE 100 Index over time.

* Customers may choose to close or make a part withdrawal from the bond and we will do this without notice. If they choose to close or make a part withdrawal, a 5% charge on the amount withdrawn will apply.

* After the Maturity Date, in the absence of any written instruction being received, the proceeds will be transferred into a Saga account being offered, selected at Saga's discretion.

* If funds are invested in the account, we will pay an interest rate** from the investment date until the issue date. This interest will then be added to the balance invested in the account of the issue date.

The information relating to the Saga 30 Month Trigger Guaranteed Equity Bond is not directed at anyone other than UK residents and applications from others cannot be accepted. The information that relates to the Saga 30 Month Trigger Guaranteed Equity Bond may not satisfy the laws of any other country.

The new issue will close to new and existing customers on 03 November and to maturities on 31 October unless we are forced to close the issue early due to over subscription. New customers will have until 10 November to return their application (five banking days after the close of the issue). We'll guarantee these rates to maturities in September as long as we’ve received customer instructions by the end of September.

# Please note that monthly interest cannot be paid back to the account. This means that the AER rate is merely for illustrative purposes only.


* The following interest rates for the life of their account:

o – First 6 months – BBR 55bps (currently 6.30% AER)

o – 6 to 12 months – BBR 45bps (currently 6.20% AER)

o – Year 2 – BBR (currently 5.75% AER)

o – Year 3 and beyond – BBR -25% (currently 5.50% AER)

* Any change to the Base Rate (BBR) by the Bank of England will be passed on to Saga Online Savings Customers in just 48 hours.

* Customers can open as many Saga Online Savings Accounts as they wish, which can be especially useful when saving for several purposes

* Minimum investment 1 and maximum 5 million

* Sole accounts only – This is an instant access account and does not require any notice for withdrawals

* The interest can be paid monthly or yearly. The gross rate if a customer chooses the monthly option is 6.12% (6.30% AER) for the first 6 months and 6.03% (6.20% AER) for 6-12 months, 5.60% (5.75% AER) for year 2, and 5.37% (5.50% AER) for year 3 (all rates are based on the BBR at 5.75%).

For further press information please contact the Saga Press Office on: 01303 771529.



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