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6 of the best two-year bonds

6 of the best two-year bonds

Category: Savings

Updated: 09/11/2017
First Published: 09/11/2017

Fixed rate bonds are still the best way to secure a guaranteed return on your savings, but what with last week's base rate rise and uncertainty as to what it actually means for savings rates, you may be reluctant to tie up your money for too long. That's where a short-term bond can come in, and a two-year deal could be the perfect compromise.

This kind of account can be ideal if you're saving up for something specific (such as a wedding, a new car or a once in a lifetime holiday) and want to be absolutely certain 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 out of arm's reach for years on end. After all, there's no telling what will happen to savings rates, as while some providers are currently raising rates, others are withdrawing some of their best deals. This means that, it you want to secure growth-generating returns without too much of a commitment, a short-term bond could be just the thing

These accounts offer the best of both worlds as far as savings are concerned - a decent rate and the peace of mind in knowing that you'll be able to access your cash in two years' time. Just bear in mind that you'll rarely be able to make further additions after your initial deposit and earlier access usually won't be possible, so you'll need to be comfortable with your investment and the two-year term.

If this sounds like the kind of short-term bond for you, read on for the best two-year deals currently available that can offer a great rate with minimal commitment.


AER
Details

Bank of London and the Middle Ease

Bank of London and the Middle East (BLME)

Premier Deposit AccountGo to Site

2.10% AER

  • £25,000 minimum deposit
  • Rate fixed for two years
  • 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 comfortably takes the top spot with this two-year deal that pays an expected profit rate of 2.00%, making it the market-leader of this sector. It's only available to those with at least £25,000 to invest and you'll have to open a linked current account in order to qualify, but if you've got a healthy savings pot this could be an ideal short-term home for your funds.

AER
Details

Atom Bank

Atom Bank

2 Year Fixed Saver

2.05% AER
  • £50 minimum deposit
  • Rate fixed for two years
  • Further additions allowed for one week after account opening
  • No withdrawals or early access
  • Can only be opened and operated by smartphone app
  • Interest paid on anniversary

Digital-only Atom Bank takes second place with its two-year bond paying 2.05% from a minimum investment of just £50. It even permits further additions for up to a week after account opening, but bear in mind that earlier access won't be possible, and you'll need to be comfortable with digital banking as the bond can only be operated via smartphone app.


AER
Details

Axis Bank

Axis Bank UK Ltd

Fixed Deposit AccountGo to Site

2.05% AER

  • £1,000 minimum deposit
  • Rate fixed for two years
  • No further additions, withdrawals or early access
  • Can be opened online or in branch before becoming post and branch-operated
  • Access via nominated current account
  • Interest paid on maturity

Axis Bank UK just makes the top three with this deal that pays 2.05% from a minimum investment of ££1,000. As is common in the sector, it doesn't permit further additions or access prior to maturity, but if you want guaranteed returns after two years it could be worth considering.


AER
Details

Ikano Bank

Ikano Bank

Fixed 2 Year Saver

2.02% AER

  • £1,000 minimum deposit
  • Rate fixed for two years
  • Further additions allowed for 14 days after account opening
  • No withdrawals or earlier access
  • Internet-operated
  • Access via nominated current account
  • Interest paid on anniversary

Next up is this two-year deal from Ikano Bank that pays 2.02% AER. It requires a minimum investment of £1,000, after which further deposits can be made for up to 14 days - an unusual feature in this sector - but there'll still be no access to those deposited funds before the full two-year term is up.


AER
Details

Al Rayan Bank

Al Rayan Bank

Fixed Term Deposit

2.02% AER

  • £1,000 minimum deposit
  • 24-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

Al Rayan Bank secures a place in the top five with this two-year deal that pays an expected profit rate of 2.02% AER (2.00% gross) on a minimum investment of £1,000. The usual fixed rate restrictions apply, with neither further additions nor early access permissible, so savers will need to be happy with both their investment and the term.


AER
Details

Paragon Bank

Paragon Bank

2 Year Fixed Rate Savings Account

2.01% AER

  • £50 minimum deposit
  • Rate fixed for two years
  • Further additions allowed for one week after account opening
  • No withdrawals or early access
  • Can only be opened and operated by smartphone app
  • Interest paid on anniversary

Just squeezing into the top six is this deal from Paragon Bank, a two-year bond that pays 2.01% AER from an initial investment of £1,000. Further deposits are allowed for five days from initial funding, after which those funds can't be accessed until the full two-year term is up.

Information & Rates correct as at: 09.11.2017

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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