Product focus: Long term fixed rate bonds - Savings - News - Moneyfacts

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Product focus: Long term fixed rate bonds

Product focus: Long term fixed rate bonds

Category: Savings

Updated: 23/04/2010
First Published: 23/04/2010

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 It is now over 6 months old so the content may be out of date.

Inflation figures announced this week will have left many savers feeling deflated.

With the Consumer Price Index increased from 3.00% to 3.40%, basic rate taxpayers need to find an account paying a rate of 4.25% just to break even on their savings, while higher rate tax payers will need to earn at least 5.64%.

Long term fixed rate bonds tend to pay higher rates compared to other accounts, however, savers must be willing to lock their money in for around four to five years.

Here are the current top fixed rate bond accounts for five years.

Barnsley Building Society – Online Bond


This account pays an annual rate of 4.70%. A monthly interest option is available 4.60%. No interest is paid until 31 May 2011. Savers can invest between £100 and £2 million and further additions are allowed while the issue is open. No early access is allowed. The account is available to savers aged 16 and over and can be operated online only.

Aldermore – 5 Year Fixed Rate Account


This account from Aldermore pays 4.60% on its anniversary. A monthly interest option is also available at 4.51%. Investments range between £1,000 and £1 million and further additions are not allowed. Early access is also not allowed. The account can be operated by savers aged 18 by post, telephone and online.

AA – 5 Year Fixed Rate Savings


The AA's five year fixed rate bond pays 4.55% on its anniversary. Savers can invest between £1 and £5 million and further additions can be made while the issue is open. Early access is allowed subject to penalties depending on the remaining term, as follows; One year or less, 90 days; one to two years, 180 days; two to three years, 270 days; three to four years, 320 days; and four to five years, 365 days. The account can be operated by post for savers aged 18 and over, although applications can be made by telephone or online.

Find the best savings accounts for you - Compare long term bonds

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 Any products featured may be withdrawn by their provider or changed at any time.

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