Skipton Building Society has launched a new two-year step-up investment bond.

The investment account's interest will rise incrementally over time, maturing on August 31st 2008.

A minimum investment of £500 is necessary to open the account, while a maximum deposit of £50,000 is available for larger investors.

Customers can also have immediate access to 20 per cent of the initial investment, with no penalty fee.

John Goodfellow, chief executive, commented, The fact the UK’s base rate has remained static since August 2005 makes it harder to predict where interest rates could be heading.

However, canny savers can guarantee an increase in the return on their investment with our new two-year step-up bond, guaranteed to rise 0.6 per cent over the next two years.

Mr Goodfellow adds that the product is one of the most competitive available.

The steps of the interest occur of time, rising to 5.1 per cent on February 28th 2007, 5.3 per cent on August 31st 2007, 5.5 per cent on February 28th 2008 and 5.7 per cent on August 31st 2008.

Steppes investment bonds such as this are similar to escalator bonds, such as Leeds Building Society's two-year fixed-rate bond which rises to 5.5 per cent in the second year.