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Fixed rate bonds – the inbetweeners

Fixed rate bonds – the inbetweeners

Category: Savings

Updated: 11/04/2013
First Published: 11/04/2013

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 It is now over 6 months old so the content may be out of date.

Medium-term fixed-rate bonds are a popular choice amongst savers, as they tend to pay higher rates than their short-term counterparts, without committing to a four or five-year investment period.

Many cautious savers are favouring two and three-year bonds, enabling them to lock money away whilst minimising the risk of being left on lower rates in the event of interest rates eventually rising.

Here is a summary of the current top 5 medium-term fixed rate bonds:

AER Details


Shawbrook Bank
3 Year Fixed Rate Bond Issue 9

2.50%
  • Investments range between £5,000 and £2 million
  • Further additions can be made whilst issue is open
  • Early access not allowed
  • Account can be operated by post or telephone and opened by post or online

Penny says: "Sitting at the top of the medium-term market is this highly competitive deal available to savers with at least £5,000 to invest.

"Access to funds during the term is prohibited, so savers must be willing to tie up their cash for the duration of the three year term."

AER Details

Close Brother Savings
Select Gold 3 Year
2.50%
  • Investments range between £10,000 and £2 million
  • Further additions and early access not permitted
  • Account can be operated by post or telephone and opened by post or online

Penny says: "Savers with at least £10,000 to stow away will be pleased with this three-year bond from Close Brothers Savings.

"Further additions are not allowed, so the full £10,000 minimum deposit must be invested straight away."

AER Details

State Bank of India
Hi Return Fixed Deposit
2.50%
  • Monthly interest rate of 2.47% paid
  • Investments range between £10,000 and £5 million
  • Further additions and early access not permitted
  • Savers must open or hold an existing State Bank of India savings or current account
  • Account can be operated in branch or by post

Penny says: "Mirroring the Close Brothers bond in terms of rate and minimum deposit is this three-year account.

"A highly competitive monthly rate of 2.47% is also available to savers who may want to supplement their income with their savings return."

AER Details

Vanquis Bank
Vanquis Bank High Yield
2.46%
  • Monthly interest rate of 2.43% paid
  • Investments range between £1,000 and £250,000
  • Further additions and early access not permitted
  • Account can be operated online only

Penny says: "Falling just shy of the market’s top three is this attractive online deal paying competitive returns on its anniversary and a monthly basis.

"Withdrawal of funds during the term is not permitted as with the majority of fixed rate bonds."

AER Details

United Bank UK
3 Year Fixed Deposit
2.45%
  • Monthly interest rate of 2.42% paid
  • Maturity rate of 2.51% paid
  • Investments range between £2,000 and £1 million
  • Further additions and early access not permitted
  • Early account closure subject to 2.00% loss of interest penalty
  • Account can be operated in branch or by post

Penny says:"Boasting competitive rates upon maturity, anniversary and monthly, this deal from United Bank UK squeezes into the top five of the market.

"Savers who close the account during the three-year term will be penalised with a 2.00% loss of interest."

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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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