Product focus: One year fixed rate bonds

Category: Savings
Date: 2/24/2010

One year fixed rate bonds are best suited to savers who can afford to lock money away with a view to achieving a guaranteed return, but see a long term bond as too risky in relation to interest rates increasing.

A range of providers offer one year fixed bonds including overseas and online banks, however, many savers feel most comfortable investing with a familiar high street name.

Here are the current top three.

Dunfermline Building Society – Fixed Rate Bond Issue 63

This account pays a rate of 3.75% on maturity. Savers can invest between £100 and £1m and further additions are allowed while the issue is open. Early access is not allowed. The account can be operated in branch, by post or telephone and is available to savers aged 16 and over.

Post Office – Growth Bond Issue 11

The eleventh issue of the Post Office's one year growth bond pays a rate of 3.30% on maturity. Investments range between £500 and £1 million. Further additions are not allowed and early access is subject to a breakage charge. This charge will be calculated and advised to savers when they request the withdrawal of funds. The account can be operated in branch, by post, telephone or online by savers aged 16 and over. The account can be opened with cash in branch for initial deposits of £1,000 or less.

Leek United Building Society – Fixed Term Saving Bond

This account pays a rate of 3.25% on maturity. Savers can invest between £1,000 and £250,000. No further additions are allowed. Funds can be accessed early, although this is subject to 120 days' loss of interest. The account can be operated in branch or by post by savers of all ages.

Compare short term fixed rate bonds or check out our best sellers savings accounts