6 of the best three-year fixed rate bonds - Savings - News - Moneyfacts

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6 of the best three-year fixed rate bonds

6 of the best three-year fixed rate bonds

Category: Savings

Updated: 10/09/2014
First Published: 09/09/2014

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Fixed rate bonds are the best, and often only, way to secure a decent return from your money. Thanks to the effects of tax and inflation, you'll currently need an account paying at least 2.00% per annum to counter those pressures and see a measurable return – and three-year fixed rate bonds can easily offer these kinds of rates.

These accounts can be ideal for those who don't mind locking their money away for the trade-off of a better rate, and having a three-year term means you don't have to worry about locking your money away for too long – a definite plus with the prospect of an increase to base rate on the cards. Offering better rates than shorter-term bonds without the commitment of five or seven-year terms, three-year bonds could offer the perfect compromise.

However, savers need to be aware of the restrictions associated with this kind of account. You'll rarely be able to withdraw funds before the end of the set term unless you want to pay an interest penalty, and with few bonds offering the chance to make further additions you'll have to be comfortable with both the level of investment and the term you've chosen.

But, if you're happy with all that and are ready to secure a decent return, it's time to get searching. Here are the top six three-year fixed rate bonds that could help you get more from your money.

AER
Details


Shawbrook Bank

3 Year Fixed Rate Bond Issue 20

2.75% AER
  • £5,000 minimum deposit
  • Further additions allowed while issue remains open
  • Withdrawals and early access not permitted
  • Account can be opened online or by post then operated by post, phone or online
  • Interest paid yearly

Penny saysPenny says…
"Taking the top spot is this deal from Shawbrook Bank, paying a market-leading 2.75% on a minimum investment of £5,000.

"Savers can benefit from the flexibility of further additions being allowed while the issue remains open, however, they'll need to keep that money locked away for the full term."

AER
Details

Aldermore

3 Year Fixed Rate Account
2.70% AER
  • £1,000 minimum deposit
  • Further additions, withdrawals and early access not permitted
  • Account can be opened and operated online, by post or by phone
  • Interest paid on anniversary of account opening

Penny saysPenny says…
"In second place is this account from Aldermore, paying a highly competitive 2.70% yearly.

"However, as is common in the fixed market, no flexibility for further additions or withdrawals is permitted, so savers will need to be comfortable with their initial investment and the term chosen."

AER
Card details

United Bank UK

3 Year Fixed Term Deposit
2.70% AER
  • £2,000 minimum deposit
  • Further additions and withdrawals not permitted
  • Early access allowed, at manager's discretion, subject to closure of the account and 270 days' loss of interest
  • Account can be opened online, by post or in branch, then managed via the final two channels
  • Interest paid on the anniversary of account opening

Penny saysPenny says…
"Just making the top three is this deal from United Bank UK, another account that pays 2.70% yearly but this time on a minimum investment of £2,000.

"Further additions and withdrawals are not permitted. However, savers can access funds early should the need arise, albeit on closure of the account and a hefty interest penalty."


AER
Details

Investec Bank plc

3 Year Fixed Term Deposit
2.65% AER
  • £25,000 minimum deposit
  • Further additions, withdrawals and early access not allowed
  • Account can be opened online then operated via the same channel or by phone
  • Interest paid on anniversary
  • Linked product: an Investec easy access account must be opened for transactional purposes

Penny saysPenny says…
"In fourth place is this account from Investec Bank plc, paying 2.65% yearly.

"Savers should note that a significant investment of £25,000 will be required to open the account, and they'll need to be comfortable tying that money up for the full term as withdrawals won't be permitted."


AER
Details


United Trust Bank

UTB 3 Year Bond

2.50% AER
  • £500 minimum deposit
  • Further additions, withdrawals and early access not allowed
  • Account can be opened online or by post but can then be managed by post only
  • Interest paid on anniversary

Penny saysPenny says…
"This postal-operated account from United Trust Bank easily makes the top five, paying a competitive rate of 2.50% on a minimum investment of just £500 – far less than the leading bonds.

"As is common in the market, further additions and withdrawals aren't permitted, so savers will need to be comfortable with both the deposit and term."


AER
Details


Vanquis Bank
Vanquis Bank High Yield

2.50% AER
  • £1,000 minimum deposit
  • Further additions, withdrawals and early access not permitted
  • Account can be opened and operated online only

Penny saysPenny says…
"This simple, internet-operated account offers 2.50% yearly, this time on a minimum investment of £1,000, putting Vanquis Bank squarely in the top six.

"Again, further additions and withdrawals won't be allowed."


Information & Rates correct as at: 09.09.2014

What next?

Find all the best saving account deals

Find the best Fixed Rate Bond savings 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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