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6 of the best long-term bonds

6 of the best long-term bonds

Category: Savings

Updated: 13/04/2017
First Published: 13/04/2017

Fixed rate bonds can be one of the best ways to secure a decent return from your money, but if you really want to secure those growth-generating rates, you'll need to think longer term. Long-term bonds generally offer terms of five or more years, and while this may seem like a long time to lock away your cash, the returns could be worth it!

These accounts are best suited to those who don't mind losing access to their money for the trade-off of a better rate, and could be ideal for savers who want their returns ro be guaranteed. Happily, fixed rates appear to be bucking the rate-cutting trend, too, and you're also more likely to find a inflation-beating deal by locking your money away - such accounts are still few and far between, but this makes it even more important to secure the best return possible.

Long-term bonds can also be perfect for those with big purchases planned in the not so distant future - a wedding or a house deposit, for example - but it's important to be aware of the restrictions. You'll rarely be able to withdraw funds before the end of the term, and with few bonds allowing further additions, you'll have to be comfortable with both the level of investment and the term chosen from the outset.

However, if you're confident you won't need the cash for a few years and are ready to secure a decent return, it's time to get searching. To help you on your way, here are the top six long-term bonds of the moment that could help you get more from your money.


AER Details

Ikano Bank
Fixed 5 Year Saver
2.35% AER
  • £1,000 minimum deposit
  • Rate fixed for five years
  • Further additions allowed within 14 days of account opening
  • Withdrawals and early access not permitted
  • Internet operated
  • Interest paid on anniversary

This account from Ikano Bank comfortably takes the top spot by paying the market-leading (and inflation-beating) rate of 2.35% to those with a minimum of £1,000 to invest. It allows further additions for a limited period, but as is common in the sector, early access won't be allowed, so you'll need to be confident about locking your final investment away for the full five years.


AER Details

Milestone Savings
Fixed Term Deposit
2.30% AER
  • £10,000 minimum deposit
  • Rate fixed for five years
  • No further additions or withdrawals
  • Account must be opened online before becoming phone, post and internet-operated
  • Access via nominated current account
  • Interest paid on anniversary and must be paid away
  • Sharia'a compliant account

In second place is this account from Milestone Savings that pays an inflation-matching expected profit rate of 2.30% from a minimum investment of £10,000. This Sharia'a compliant account doesn't permit further additions or withdrawals, but for those with a decent savings pot who are willing to forego access, it could be a good option.


AER Details

Secure Trust Bank
Fixed Rate Bond 5 Year
Term (series 31)
2.26% AER
  • £1,000 minimum deposit
  • Rate fixed to 10.5.22
  • Further additions allowed while issue remains open (min. £1,000)
  • No withdrawals or earlier access
  • Must be opened online before becoming post and phone-operated
  • Interest paid yearly and must be paid away

Just making the top three is this deal from Secure Trust Bank, a five-year account that pays a rate of 2.26% from a minimum deposit of £1,000. It allows further additions for a limited period, but withdrawals and early access again won't be allowed, so it'll only be suitable for those comfortable with a five-year commitment.


AER Details

Paragon Bank
Five Year Fixed Rate
2.25% AER
  • £1,000 minimum deposit
  • Rate fixed for five years
  • Further additions allowed for five days from account opening
  • No withdrawals or early access
  • Access via nominated current account
  • Internet operated
  • Interest paid on anniversary

Next up is this five-year account from Paragon Bank that pays 2.25% on a minimum investment of £1,000. Fairly unusually in this sector, further additions are permitted for a limited time, but early access won't be possible. Savers must therefore be certain that they're happy with their overall investment and the length of the term.


AER Details

Bank of London and the Middle East
Premier Deposit Account
2.25% AER
  • £25,000 minimum deposit
  • Rate fixed for five years
  • Further additions, withdrawals and early access not permitted
  • Must be opened online before becoming post and internet-operated
  • Interest paid on anniversary and must be paid away
  • Linked product: must have or open a BLME current account to hold funds pending investment
  • Sharia'a compliant account

Bank of London and the Middle East secures a place in the top five with this deal that pays an expected profit rate of 2.25%, provided you've got a minimum of £25,000 to invest. It's a hefty deposit requirement, but for those happy with the restrictions - both the typical access restrictions and linked account requirements - it could be worth it.


AER Details

Atom Bank
5 Year Fixed Saver
2.15% AER
  • £50 minimum deposit
  • Rate fixed for five years
  • Further additions permitted for one week from account opening
  • Withdrawals and early access not allowed
  • Must be opened and operated by mobile app
  • Interest paid on anniversary

Just squeezing into the top six is this account from Atom Bank, a relative newcomer to the savings sector, boasting a five-year deal that pays 2.15%. It requires a minimum deposit of just £50 and allows further additions for a limited period, so if you're comfortable with the fact that you can only operate it by smartphone app, it could be a viable home for your long-term savings.

Information & Rates correct as at: 12.04.2017

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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