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6 of the best one-year bonds

6 of the best one-year bonds

Category: Savings

Updated: 06/10/2017
First Published: 05/10/2017

Fixed rate bonds are still one of the best ways to secure a decent return from your hard-earned cash, but that doesn't mean you want to commit to locking your money away for years on end. That's where a one-year bond could come in.

Take a look at the best savings rates and you'll see that there are plenty of one-year bonds available that can offer growth-generating returns, and given that one-year bond rates have recovered from their base rate cut, now could be a great time to get in on the action.

This kind of account can be ideal if you're saving up for something specific - such as next year's holiday, a wedding or a new car - and want to be absolutely certain that you won't be tempted to spend the money in the meantime. They're also perfect if you think rates could rise in the near-future and don't want to keep your money locked away for too long, making a one-year bond the perfect compromise.

However, you'll want to be aware of the restrictions associated with these accounts before you jump in. Most fixed rate bonds won't allow you to make further additions after you've made your initial deposit, and you'll rarely be able to access your funds early (even if it's allowed, you could be hit with hefty interest charges), so you'll need to be confident you won't need your cash for the full 12-month term.

You also need to make sure that you're choosing the best savings account for your needs, and we know just how you can start! Read on for the current top six one-year bonds that can offer you a decent rate in return for a commitment of just 12 months.

AER
Details

BLME

Bank of London and the Middle East (BLME)

Premier Deposit AccountGo to Site

2.00% AER
  • £25,000 minimum deposit
  • Rate fixed for one year
  • Further additions, withdrawals and early access not permitted
  • Postal-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 easily takes the top spot with this deal that pays an expected profit rate of 2.00%, the market-leader of the one-year bond sector. Savers should note that it's only available to those with a minimum of £25,000 to invest, and they'll be required to open a linked current account, but this could be a small price to pay for someone seeking a short-term home for a hefty savings pot.


AER
Details

Al Rayan Bank

Al Rayan Bank

Fixed Term Deposit

Go to Site

1.91% AER

  • £1,000 minimum deposit
  • 12-month bond
  • Further additions, withdrawals and early access not permitted
  • Interest paid quarterly
  • Can be opened and operated online, by post, by phone and in branch
  • Sharia'a compliant account

In second place is Al Rayan Bank with this one-year deal that pays an expected profit rate of 1.91% AER (1.90% gross) on a minimum investment of £1,000. It comes with the usual fixed rate restrictions in that neither further additions nor early access will be permitted, so savers must be sure they're happy with their initial investment and the 12-month term.


AER
Details

Harrods Bank

Harrods Bank

1 Year Fixed Rate Deposit Issue 24

1.90% AER

  • £20,000 minimum deposit
  • Rate fixed for one year
  • No further additions, withdrawals or early access
  • Can be opened online, in branch or by post, before becoming post, phone and branch-operated
  • Linked product: Call Deposit account automatically opened for account funding purposes
  • Interest paid yearly

Harrods Bank just makes the top three with this one-year bond paying 1.90%, provided you've got a minimum of £20,000 to invest. The deal requires a linked current account and doesn't permit access prior to maturity, but if you've got a healthy savings pot and want guaranteed returns after a year, it could be worth considering.


AER
Details

Kent Reliance

Kent Reliance

1 Year Fixed Rate Bond Issue 49

1.85% AER

  • £1,000 minimum deposit
  • One-year bond
  • No further additions
  • Withdrawals allowed subject to 180 days' loss of interest (withdrawal method dependent on how account is opened)
  • Access via nominated current account
  • Can be opened online (minimum age 18), in branch or by post, and then managed in the same ways as well as by phone
  • Interest paid on maturity

Next up is this account from Kent Reliance, a one-year deal that pays 1.85% from £1,000. No further additions can be made, but unusually, earlier access is permitted; savers should note that withdrawals will result in a 180-day loss of interest penalty, but the flexibility will be highly appealing to those not sure they can commit their money for the full term.


AER
Details

Wyelands Bank

Wyelands Bank

12 Month Fixed AccountGo to Site

1.83% AER

  • £5,000 minimum deposit
  • Rate fixed for 12 months
  • Further additions allowed for 14 days after account opening
  • No withdrawals or earlier access
  • Must be opened online but can then be managed by phone as well
  • Interest paid on maturity and must be compounded

Newcomer Wyelands Bank has firmly established itself in the fixed bond sector with this 12-month deal that pays 1.83% AER. It requires a minimum investment of £5,000, after which further deposits can be made for 14 days - an unusual feature in the fixed bond market - but as is common, there'll be no access to funds before the 12-month term is up.


AER
Details

Milestone Savings

Milestone Savings

Fixed Term DepositGo to Site

1.82% AER

  • £10,000 minimum deposit
  • One-year bond
  • Further additions, withdrawals and early access not permitted
  • Interest paid on maturity and must be paid away
  • Internet-operated
  • Sharia'a compliant account

Milestone Savings just squeezes into the top six with this 12-month bond that pays an expected profit rate of 1.82%. It's an internet-operated account that requires a fairly hefty minimum investment of £10,000, after which no further deposits can be made and funds cannot be accessed until maturity.

Information & Rates correct as at: 05.10.2017

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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