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Top 5 fixed rate bonds, split by investment terms

Top 5 fixed rate bonds, split by investment terms

Category: Savings

Updated: 26/04/2013
First Published: 23/04/2013

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 It is now over 6 months old so the content may be out of date.

Savings accounts with fixed rates can offer savers very competitive returns for locking their money away for a set period of time.

If you choose to invest in a fixed-rate bond, it is always wise to bear in mind these two factors:

1: Remember that many fixed-rate accounts will not allow you to make withdrawals during the term and you may be penalised for breaching this condition.

2: Keep a note of when your bond is due to mature. Providers may automatically re-invest your money into a lesser paying bond or variable rate deal after maturity meaning your return could drop considerably.

Staying on top of your maturity date will leave you with plenty of time to search the market and transfer your money into another competitive paying account.

Here are the current top fixed-rate accounts for each term:

1 year Fixed Rate Bonds:

Shawbrook Bank
Shawbrook Bank
1 Year Fixed Rate Bond Issue 9

2.15% AER/Gross
  • Minimum investment £5,000
  • Maximum investment £2 million
  • Further additions allowed whilst the issue is open
  • Early access or withdrawals are not permitted
  • Can be operated by post or telephone
  • Can be opened online or by telephone

Penny saysPenny says…
"Sitting at the top of the one-year fixed rate bond market this account is highly competitive to savers with investments of £5,000 and over.

"Additional deposits can be made to the account during the term, although as is the case with most fixed-rate products, funds must remain untouched."

2 year Fixed Rate Bonds:

IBB
Islamic Bank of Britain
Sharia'a Compliant Fixed Term Deposit

2.63% AER/2.60% Gross
  • Minimum investment £1,000
  • Early access and further additions not permitted
  • Can be operated in branch, by post, telephone and online

Penny saysPenny says…
"This Sharia'a compliant bond offers an attractive quarterly indicative profit rate to investors of all faiths.

"Early withdrawals and further additions are not allowed, so savers must be prepared to lock away as much money as possible for the duration of the twenty-four month term."

3 year Fixed Rate Bonds:

Vanquis Bank
Vanquis Bank
High Yield

2.51% AER/Gross
  • Monthly interest paid at 2.48%
  • Minimum investment £1,000
  • Maximum investment £250,000
  • Early access and further additions not permitted
  • Can be operated online only

Penny saysPenny says…
"Heading up the medium-term bond market is this three-year deal from Vanquis Bank.

"As well as paying a market-leading rate on its anniversary, this bond should also appeal to savers looking to supplement their income with a competitive monthly return."

4 year Fixed Rate Bonds:


Sainsburys Bank
Sainsbury's Bank
Fixed Rate Saver

2.45% AER/Gross
  • Minimum investment £5,000
  • Maximum investment £50,000
  • Monthly interest also paid at 2.45%
  • Early access and further additions not permitted
  • Can be operated by telephone or online

Penny saysPenny says…
"This four-year bond from Sainsbury's Bank pays a very competitive rate for savers with investments of £5,000 and over.

"Savers must be prepared to lock their funds away for the four-year period as early access is prohibited."

5 year Fixed Rate Bonds:

Skipton BS
Skipton
Building Society
5 Year E-Bond

3.00% AER/Gross
  • Monthly interest paid at 3.00% (AER) and 2.96% (gross)
  • Minimum investment £500
  • Maximum investment £1 million
  • Further additions allowed whilst the issue is open
  • Early access not permitted
  • Can be operated online only

Penny saysPenny says…
"Savers looking to tie up their money over a five-year period should find this online deal from Skipton Building Society appealing.

"Those looking to receive interest on a monthly basis must be aware that a lower gross rate of 2.96% is paid, despite the AER matching that of the anniversary rate."


Information & Rates correct as at: 26/04/2013

What next?

Compare the best savings rates
1 year fixed rate bonds
2 year fixed rate bonds
3 year fixed rate bonds
4 & 5 year fixed rate 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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