Abbey has announced the launch of a stepped rate savings bond.

Available between now and January 10th 2006, the savings bond will offer three savings rates.

Rates will begin with an annual gross rate of 4.3 per cent and increase to 4.6 per cent on October 10th 2006. The final increase will take place on April 2nd 2007, at which point the interest rate will rise to five per cent.

The money saving product, which will last for 21 months, requires a minimum deposit of £1 and is limited to investments of £2 million. Additional deposits cannot be made once the savings bond has been opened.

Commenting on the stepped bond, Alexia Kilby, head of savings marketing at Abbey, said: This is a great way for people to get a good return on their money but also have the security of knowing that their money is 100 per cent guaranteed.

With a fixed rate of interest that increases during the term of the bond, customers know exactly what they're getting back on their money.

Abbey offers a range of personal finance products, including mortgages, saving accounts, homeowner loans and credit cards.