Bonus Rate

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Bonus Rate

An interest rate that is added to the interest rate of an annuity in the first year of its existence. For example, an insurance company may sell a fixed annuity with a 5% rate but apply a bonus rate of 2% in the first year so that the principal increases by a total of 7%. In the second and subsequent years, the bonus rate reverts to 5%. The bonus rate is a sweetener to attract customers.
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The regulator stopped short of banning introductory bonus rates, as it believes they may benefit some customers, but said earlier this year that it expected providers to improve the way they communicate about interest rate changes and when the bonus rate expires.
Out of 18 providers it looked at who oer bonus rates, only 12 contacted customers at least two months before the bonus period ended.
com, says that with interest rates at ultra-low levels, the timing of many bonus rates being scrapped "could not be worse".
com, says with interest rates at ultra-low levels, the timing of many bonus rates being scrapped "could not be worse".
INTRODUCTORY bonus rates on instant access accounts are fast disappearing as the Funding For Lending scheme continues to batter returns for savers.
ISA savers with cash ISA bonus rates due to expire should shop around and avoid remaining on low rates
LIC International has declared the highest bonus rates among the life insurance companies in the Gulf region.
The bonus rates have been increased for the 10th year in succession, according to the company.
Customers register for an email and text alert service, which advises savers with variable rate accounts of changes to interest rates and when bonus rates expire.
7% in 2011; it is maintaining annual bonus rates on its endowments (to reduce potential shortfalls for homebuyers) but has cut bonuses on most bonds and pensions.
This is the ninth year in succession in which the bonus rates have been increased, the company said.
Life Insurance Corporation (LIC) International, a subsidiary of LIC of India, has declared bonus rates ranging from $29 to $31per $1,000 sum assured for endowment policies.