Let's be honest, savings rates aren't great at the moment. But then again, they've not been great for some time now – 30 months to be precise. That's when the Bank of England brought Base Rate to its unprecedented low of 0.50%, in March 2009.
For savers this is troubling. Do you wait and see if rates rise, finding a good easy access savings account or 1 year savings bond? Or do you commit longer term?
If you rely on your savings for income, it's hardly ideal to wait and see, as the highest savings rates are on longer term fixed rate savings bonds. On the flipside, the downside with bonds is that your money is committed for a long term. You may not be allowed access – leaving you stuck if rates go up during the term (or if you can get access you will normally have to forfeit a large amount of interest).
Having said all of that, long term savings bonds remain popular for many savers. So, without further ado, let's look at some of the best accounts available…
5 Year Fixed Rate
4 Year Fixed Rate Bond - Series 4
Don't forget your ISA allowance! Even if you need to take the interest you earn as income, don't forget cash ISAs. You can get fixed rate cash ISAs, just like you can get fixed savings bonds – for terms of up to 5 years. Because you pay no tax on the interest, you can earn more from your savings.
You can invest up to £5,340 in the 2011-12 tax year and most bonds will allow you to transfer your existing ISA pot as well.
Make sure you note the equivalent interest rates you'd need to earn on a non-ISA savings account – in some cases you might need to find an account paying 3% higher!
Find the best savings accounts for you - Compare long term fixed rate accounts
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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