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6 of the best one-year bonds

6 of the best one-year bonds

Category: Savings

Updated: 06/12/2017
First Published: 06/12/2017

Fixed rate bonds are still one of the best ways to secure a decent return from your hard-earned cash, but that doesn't mean you want to commit to locking your money away for years on end. That's where a one-year bond could come in.

Take a look at the best savings rates and you'll see that there are plenty of short-term bonds available that can offer growth-generating returns, and given that fixed bond rates have been ramping up, now could be a great time to get in on the action.

A one-year account can be ideal if you're saving up for something specific - such as next year's holiday, a wedding or a new car - and want to be absolutely certain that you won't be tempted to spend the money in the meantime. They're also perfect if you think rates could rise in the near-future and don't want to keep your money locked away for too long, particularly now that base rate has risen, making a one-year bond the perfect compromise.

However, you'll want to be aware of the restrictions associated with these accounts before you jump in. Most fixed rate bonds won't allow you to make further additions after you've made your initial deposit, and you'll rarely be able to access your funds early (even if it's allowed, you could be hit with hefty interest charges), so you'll need to be confident you won't need your cash for the full 12-month term.

You also need to make sure that you're choosing the best savings account for your needs, and we know just how you can start! Read on for the current top six one-year bonds that can offer you a decent rate in return for a commitment of just 12 months.

AER
Details

BLME

Bank of London and the Middle East (BLME)

Premier Deposit AccountGo to Site

2.00% AER
  • £25,000 minimum deposit
  • Rate fixed for one year
  • Further additions, withdrawals and early access not permitted
  • Postal-operated
  • Interest paid on maturity and must be paid away
  • Linked product: must have or open a BLME current account to hold funds pending investment
  • Sharia'a compliant account

Bank of London and the Middle East easily takes the top spot with this deal that pays an expected profit rate of 2.00%, the market-leader of the one-year bond sector. Savers should note that it's only available to those with a minimum of £25,000 to invest and they'll be required to open a linked current account, but this could be a small price to pay for someone seeking a short-term home for a hefty savings pot.


AER
Details

Al Rayan Bank

Al Rayan Bank

Fixed Term Deposit

1.86% AER

  • £1,000 minimum deposit
  • 12-month bond
  • Further additions, withdrawals and early access not permitted
  • Interest paid quarterly
  • Can be opened and operated online, by post, by phone and in branch
  • Sharia'a compliant account

In second place is Al Rayan Bank with this one-year deal that pays an expected profit rate of 1.86% AER (1.85% gross) on a minimum investment of £1,000. It comes with the usual fixed rate restrictions in that neither further additions nor early access will be permitted, so savers must be sure they're happy with their initial investment and the 12-month term.


AER
Details

Atom Bank

Atom Bank

1 Year Fixed Saver

1.85% AER

  • £50 minimum deposit
  • Rate fixed for one year
  • Further additions permitted for one week from account opening
  • No withdrawals or early access
  • Can only be opened and operated by mobile app
  • Interest paid on anniversary

Atom Bank just makes the top three with this one-year bond paying 1.85%, and you only need £50 to get started. It even allows further additions for up to a week after the account has been opened, but you still won't be able to access your funds early, so you'll need to be comfortable with the one-year term. Savers should also note that this deal can only be opened and operated by smartphone app, but for savvy mobile bankers, this account could be just the thing.


AER
Details

Investec Bank plc

Investec Bank plc

1 Year Fixed Term Deposit

1.85% AER

  • £25,000 minimum deposit
  • One-year bond
  • No further additions or withdrawals
  • Linked product: must have or open an easy access account for transactional purposes
  • Access via nominated current account
  • Must be opened online, but can then be managed by phone as well
  • Interest paid on anniversary

Next up is this account from Investec Bank plc, a one-year deal that pays 1.85% provided you've got a minimum of £25,000 to invest. The deal requires a linked current account and doesn't permit access prior to maturity, but if you've got a healthy savings pot and want guaranteed returns after a year, it could be worth considering.


AER
Details

Milestone Savings

Milestone Savings

Fixed Term DepositGo to Site

1.82% AER

  • £1,000 minimum deposit
  • One-year bond
  • Further additions, withdrawals and early access not permitted
  • Interest paid on maturity and must be paid away
  • Internet-operated
  • Sharia'a compliant account

Milestone Savings secures a top-five spot with this 12-month bond that pays an expected profit rate of 1.82%. It's an internet-operated account that requires a minimum investment of £1,000, after which no further deposits can be made and funds cannot be accessed until maturity, as is common in the sector.


AER
Details

Charter Savings Bank

Charter Savings Bank

Fixed Rate Bond

1.81% AER

  • £1,000 minimum deposit
  • Rate fixed for one year
  • Further additions allowed for 14 days after account opening via nominated account
  • No withdrawals or earlier access
  • Internet-operated
  • Interest paid on anniversary

Just squeezing into the top six is this deal from Charter Savings Bank, a one-year bond that pays 1.81% from a minimum investment of £1,000. Unusually, it permits further additions for up to 14 days after opening the account, after which no access will be allowed before the full term is complete.

Information & Rates correct as at: 06.12.2017

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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