6 of the best short-term bonds - Savings | moneyfacts.co.uk

News

Moneyfacts.co.uk News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

6 of the best short-term bonds

6 of the best short-term bonds

Category: Savings

Updated: 12/10/2017
First Published: 11/10/2017

Looking for a bit of extra security when it comes to your cash, but don't want a long-term commitment? That's where a short-term bond could come in. This kind of savings account can give guaranteed returns without asking you to lock your money away for too long, the ideal combination given that it's difficult to know what's coming next.

Short-term bonds can be perfect if you're planning a big purchase in the next year or so and want the best interest rates possible on a lump sum of cash, and are even more appropriate if you think rates could rise in the next few years and are therefore reluctant to tie up your money for too long. And, given that short-term bond rates have seen a particular boost recently, now could be a great time to consider your options.

However, it's important to be aware of the restrictions associated with these kinds of savings accounts. Most won't let you make further additions, and earlier access (if permitted) could incur hefty penalties, so you'll need to be happy with both your investment and the term of the bond from the outset. But, if you've got a lump sum to invest and are confident you won't need the cash in the foreseeable future, these fixed rate bonds could be the ideal solution.

So, to get you started, here are the top six short-term bonds currently on the market, all of which have terms of between 12 and 18 months:

AER
Details

Al Rayan Bank

Al Rayan Bank

Fixed Term Deposit

2.06% AER
  • 18-month bond
  • £1,000 minimum deposit
  • Further additions, withdrawals and early access not allowed
  • Account can be opened and operated online, by post, in branch and by phone
  • Interest paid quarterly
  • Sharia'a compliant account

Taking the top spot is this deal from Al Rayan Bank which pays an expected profit rate of 2.06% AER (2.04% gross), making it the market-leader for its term. It doesn't permit further additions or withdrawals, yet it could be a competitive choice for those seeking a short-term home for their funds, provided you're willing to tie your money up for the full 18 months.


AER
Details

BLME

Bank of London and
the Middle East (BLME)

Premier Deposit Account
Go to Site

2.05% AER

  • 18-month bond
  • £25,000 minimum deposit
  • No further additions, withdrawals or early access
  • Account can only be managed by post
  • Linked product: savers must have or open a BLME current account to hold funds pending investment
  • Interest paid on maturity and must be paid away
  • Sharia'a compliant account

In second place is this near market-leading deal from BLME which pays an expected profit rate of 2.05% AER, but only for those with a pot of at least £25,000 that they don't mind locking away for 18 months. It doesn't permit further additions or withdrawals and requires a linked BLME current account, but it could be a competitive choice if you're looking for decent returns on an already healthy savings pot.


AER
Details

BLME

Bank of London and
the Middle East (BLME)

Premier Deposit Account
Go to Site

2.00% AER

  • One-year bond
  • £25,000 minimum deposit
  • No further additions, withdrawals or early access
  • Account can only be managed by post
  • Linked product: savers must have or open a BLME current account to hold funds pending investment
  • Interest paid on maturity and must be paid away
  • Sharia'a compliant account

BLME is a force to be reckoned with in the short-term market, with its 12-month bond securing the number three spot and this time boasting the top rate for its term, an expected profit rate of 2.00% AER. Its other features mirror that of the 18-month version, providing an attractive alternative for those with a hefty savings pot who don't want to lose access to their funds for more than a year.


AER
Details

Harrods Bank

Harrods Bank

18 Month Fixed Rate
Deposit Issue 21

1.95% AER

  • 18-month bond
  • £20,000 minimum deposit
  • No further additions, withdrawals or early access allowed
  • Account can only be opened online, by post or in branch, before becoming branch, post and phone-operated
  • Linked product: Call Deposit account automatically opened for account funding purposes
  • Interest paid yearly

Next up is this deal from Harrods Bank, an 18-month account that pays a fixed rate of 1.95% to those with at least £20,000 to invest. As is common in the sector, no further additions are permitted and withdrawals won't be allowed until the full term is up, so savers must be comfortable with both their initial investment and the 18-month commitment.

AER
Details

Al Rayan Bank

Al Rayan Bank

Fixed Term Deposit

1.91% AER
  • 12-month bond
  • £1,000 minimum deposit
  • Further additions, withdrawals and early access not allowed
  • Account can be opened and operated online, by post, in branch and by phone
  • Interest paid quarterly
  • Sharia'a compliant account

Al Rayan Bank secures another place in the charts with the 12-month Fixed Term Deposit, which pays an expected profit rate of 1.91% AER (1.90% gross) from a minimum investment of £1,000. All other features mirror that of its 18-month counterpart.


AER
Details

Harrods Bank

Harrods Bank

1 Year Fixed Rate
Deposit Issue 24

1.90% AER

  • 12-month bond
  • £20,000 minimum deposit
  • No further additions, withdrawals or early access allowed
  • Account can only be opened online, by post or in branch, before becoming branch, post and phone-operated
  • Linked product: Call Deposit account automatically opened for account funding purposes
  • Interest paid yearly

Harrods Bank has also managed to squeeze in another account, completing the top six with its 12-month bond that pays a fixed rate of 1.90%. A minimum investment of £20,000 is again required, with no further additions or early access permitted, so as with the other top-six bonds savers will need to be happy with their chosen term from the outset.

Information & Rates correct as at: 11.10.2017

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.

Close