Varying economic forecasts may have left some savers feeling confused as to where is the best place for their savings. With some experts predicting a rise in interest rates, customers favouring fixed rate bonds will fear that they could find themselves locked into an uncompetitive rate further down the line.
While this is an understandable concern, there is also the option of short-term fixed rate bonds, which allow customers to lock cash away for a shorter period, around two years, which should minimise this risk and provide some peace of mind. These are the current top two year fixed rate bond accounts:
AA – Internet 2 Year Fixed Rate Bond
AA's online two year fixed rate bond pays a rate of 4.35 per cent, with a monthly interest option at 4.27 per cent. Savers can invest between £500 and £5 million. If cash is accessed within the two year period, account holders will incur a penalty of 90 days loss of interest. Further additions are allowed whilst the issue is open. The account can be operated online only by savers aged 18 and over.
Chelsea Building Society – Autumn Bond (no access) 2 Year Option
This account pays a rate of 4.30 per cent until 2nd November 2011. A monthly interest options is also available at 4.22 per cent. No interest is paid until 1st November 2010. Investments range from £1,000 to £500,000. No early access is allowed, although further additions can be made whilst the issue is open. The account is available to savers aged 16 and over and can be operated in branch and by post.
Post Office – Growth Bond Issue 10
This product pays a rate of 4.25 per cent over a two year period. Interest on deposits of £50,000 and over is paid in gross. Savers can invest between £500 and £1 million. Early access and further additions are not permitted. The account is open to savers aged 16 or over, although the account can be opened for a child by an adult. It can be operated in branch, by post or telephone and online.
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 Any products featured may be withdrawn by their provider or changed at any time.
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