Act fast to bag the best bond - Savings - News - Moneyfacts

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Act fast to bag the best bond

Act fast to bag the best bond

Category: Savings

Updated: 04/07/2012
First Published: 04/07/2012

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 It is now over 6 months old so the content may be out of date.
Research by Moneyfacts.co.uk has revealed that the length of time a fixed rate bond is on the market for has fallen to just 30 days.

This is the lowest level since December 2008, when the period was 28 days. In the months before base rate fell to its historic low of 0.50%, the average length of time bonds were available for has typically been over 100 days, peaking at 158 days in March 2006.

Average bond rates have also begun to fall over the past few months. The average five-year bond rate has fallen from 4.02% at the start of April to 3.88%.

Fixed rate savings bonds, particularly long term bonds, tend to pay some of the better rates of return in the market. Some of the highest paying five year bonds pay rates which actually beat 3.5%, the rate at which a basic rate taxpayer would need to beat CPI.

Sylvia Waycot , spokesperson for Moneyfacts.co.uk, said: "Fixed rate bonds continue to be the darling of savers and the banks and building societies have seized this opportunity by increasing the product choice from 274 in 2010, to 313. However, in recent months there has been a downward trend on the rates of return these bonds promise, resulting in savers rushing to secure the best deals, which is why today these bonds are only around for an average of 30 days.

"Once a few providers start to cut rates, others will follow suit as no provider wants to pay more than they need to attract savers' money. This means that savers must actively hunt out the best deal knowing that when market-leading deals are launched they are oversubscribed extremely quickly. If savers want to secure top rates they literally need to sprint into action or they will end up in second place," she warned.

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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 Any products featured may be withdrawn by their provider or changed at any time.

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