Have we become a nation of savers?

My stockbroker chum says demand for Royal Bond is not booming - yet. Instead, he says, canny customers have been checking into the Heineken 2015 bond, paying 7.25% each March and due to be redeemed (at £1 per unit) in 2015.

As a predominantly family-owned company, Heineken bonds cannot be bought by major pension funds, which helps to keep their price down.

However, higher rates from corporate bonds usually reflect greater risk and the fact your money is not guaranteed. Tesco bonds, seen as super safe, pay 3.90 - 4.50% - with no shortage of takers.

The other danger with corporate bonds is that rising interest rates - which must come eventually - will push their price down. So the lump sum eventually collected on maturity of either bonds or bond funds could be lower than the original investment.

Colin Jackson at Baronworth Investment Services is among financial advisors offering the RBS Royal Deposit Bond: on a minimum £3,600 investment, which can be held in an ISA for largely tax-free income, Baronworth offers 4.28% in years one and two, and 5.03% in year three.

Investors who go direct to RBS get slightly less, at 4.25% gross.

Says Mr Jackson: "Among savers, the market is dividing: many with more than £50,000 settle for lower returns so long as they have complete security of their money.

"They are splitting money between various deposit takers to stay below £50,000 in each case, but some of them are beginning to run out of deposit takers.

"The second group needs income, and simply cannot survive on 2% returns which are typical in the mainstream savings market. They look at structured products, where returns can be around 7%, but risks are greater and there is no guarantee that the original investment will be repaid."

Colin Jackson thinks a decent return on a no-risk investment is around 4%. Above that, some degree of risk is usually involved.

For income-seeking clients, Baronworth is about to offer a five year bond from Gilliat Income Series (part of Arbuthnot Bank) for minimum deposits of £3,000 (for inclusion within an ISA tax wrapper, if required) which promises monthly income of 0.625%, or 7.5% annually.

On maturity, clients get all or part of their original investment back. The fund is linked to one of three indexes which monitor UK shares, commodities and property.

Financial advisor Hargreaves Lansdown steers income seekers towards the Invesco Perpetual Distribution Fund, currently paying annual income of 5.78% on minimum deposits of £1,000, with top-ups (usually £500) at any time.

Around 62% of the fund is held in corporate bonds, 4% in cash and 34% in equities.

Says Danny Cox at Hargreaves Lansdown: "Many savers take more risk to get more income. Some go entirely for corporate bond funds, while the Distribution Fund is slightly higher risk with a third invested in shares."

Although investors can sell out at any time, Mr Cox says it should be held for a minimum five years, to lessen the impact of market movements. In some cases, he says, investors put 7-10% of a portfolio in a product of this type - with an ISA option for those keen to cut their tax bill.

Finally, savers approaching retirement are attracted by Standard Life's Tailored Investment Bond, for minimum £15,000 investments and minimum £2,500 top ups at any time.

The money is invested in a range of managed funds, usually chosen with expert advice from a Standard Life advisor or an independent financial advisor, and 5% of the value of the fund can be withdrawn each year with no tax liability.

Standard Life's Mark Polson says the fund has attractions to higher rate taxpayers who are basic rate taxpayers by the time they withdraw money. Money invested often comes from inheritances, or from lump sums from a pension fund on retirement.

::Information: Baronworth Financial Services (020 8518 1218); Saga (0845 850 0664 and www.saga.co.uk); Standard Life Tailored Investment Bond (0845 279 8810 and www.standardlife.co.uk/tailored); Royal Bond from RBS (0800 121 6286 and www.rbs.co.uk/royalbond); Hargreaves Lansdown (0845 345 0800); Yorkshire BS (0845 120 0100 and www.ybs.co.uk)

Poundnotes

:: Don't expect to sign up to a great household energy deal on your doorstep, warns price comparison service uSwitch.com, which reckons seven million households have taken out a new deal through a direct salesman and only 22% of them think they got a good deal.

Among the rest, some 22% thought they could have got a better deal elsewhere and 17% found the new deal cost more money than the old one.

uSwitch.com is urging industry regulator Ofgem to bring in tighter controls on direct salesmen. However, Ofgem apparently feels that vulnerable and prepayment meter customers are more likely to switch in response to doorstep salesmen, and is unlikely to ban them outright.

Says Ann Robinson, at uSwitch.com: "With the right rules in place, direct selling could be an effective way of reaching a wider range of consumers and encouraging people to switch to a better energy deal."

:: If interest rates stay low for 2-3 years on the back of a slow economic recovery, an increasing number of homebuyers should get a variable rate mortgage, says Ray Boulger, at leading broker John Charcol.

"The differential between fixed and variable rate pricing is now such that fixed rates appear to be discounting the rise in interest rates which will eventually happen too much, too quickly", says Mr Boulger.

Charcol says fixed rate loans only account for 35.6% of its new business, with borrowers on larger mortgages particularly keen on variable rates.

In April fixed rate loans accounted for 82% of Charcol new business. By August, the figure had halved, to just 41.9%.

Enquiries: John Charcol (0800 718191 and www.charcol.co.uk).

:: Parents who expect to pay off debts run up by student sons and daughters may be under-estimating the actual debt by around £100m, warns Abbey, the High Street bank.

To help parents and children better manage student debt, Abbey has created a 'University Finance Guide' which includes simple tips and advice on organizing and managing the finance of further education.

Abbey's John Thorpe says parents mostly had a very "dissimilar experience" with student finance, compared to their children, and are therefore completely unprepared when final bills roll in.

Enquiries: www.aboutabbey.com

:: Despite the bounceback of London share prices, around one in four potential investors - about 11.9 million people - are ruling out equity investments because they lack confidence in shares or don't want to lose more money, says Prudential.

Says Prudential's Trevor Cheal: "Investors often act irrationally and driven by fear they sit out the markets as they begin to recover, missing out on some potentially spectacular gains."

:: High five savers:

Phone No Rate Account Period Deposit Interest paid

Yorkshire BS www.ybs.c.uk 5.30% (F) eBond 31/12/14 £100 Yly

Principality BS 0845 045 0452 5.30% (F) Fixed Rate Bond 150 Five Year Bond £500 Yly

West Bromwich BS via branch 3.67% Branch Bonus Instant £100 Yly

Citibank www.citibank.co.uk 3.30% Flexible Saver 6 Instant £1 Mly

First Save www.firstsave.co.uk 3.25% 90 Day Notice 90 Days £5,000 Yly

Top five borrowers

Phone No Rate Period Max% Adv Fee Incentive

HSBC (Rem) 0800 494999 1.99% discounted for two years 60% £1,199 Yes

First Direct (Rem) 0845 610 0100 3.14% variable for term 75% £699 Yes

ING Direct (UK) 0845 603 8888 3.o9% for term 75% £695 Yes

Co-operative Bank 0800 633 5286 3.24% to 30/09/12 75% £995 Yes

The One account 0845 610 1060 3.75% for term 75% none Yes

Code:

*F - Fixed

*P - Operated by Post

*B - Operated by Post/Telephone

*T - Operated by Telephone

*W - Operated by Internet

*H - Operated by Internet/Telephone

*S - Available only to those aged 50 or over

*R - Available to those aged 60 and over.

:: Source: Money£acts - Tel: 01603 476 476 (All rates subject to change without notice).