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6 of the best three-year bonds

6 of the best three-year bonds

Category: Savings

Updated: 22/09/2017
First Published: 21/09/2017

Fixed rate bonds are one of the best ways to secure a decent return from your cash, but the thought of locking your money away for years on end can understandably be daunting. So why not compromise - what about a three-year bond?

Take a look at the best savings rates and you'll see that there are plenty of medium-term accounts that can help you secure growth-generating rates, and three years could be the ideal compromise. Your returns are guaranteed, too, unlike with a variable rate account, and with average fixed bond rates having recovered from the base rate cut, now could be a great time to get in on the action.

However, it's important to be aware of the restrictions, as most fixed rate bonds won't allow you to make further additions or access your funds early - and if they do they could penalise you heavily - so you'll need to be confident you won't need your chosen investment for the full three years.

You also need to make absolutely certain that you're choosing the best savings account for your needs, and we're happy to help! Here are the current top six three-year bonds that could help you secure a decent return without losing access for half a decade or more.


AER
Details

Al Rayan

Al Rayan Bank

Fixed Term DepositGo to Site

2.32% AER

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

Al Rayan Bank comfortably takes the top spot with this account that pays an expected profit rate of 2.32% (2.30% gross), making it the market-leader of the three-year bond sector. It requires a minimum investment of £1,000, after which further additions won't be permitted and nor will early access, so savers must be sure they're happy with their overall investment and the length of the term.

AER
Details

BLME

Bank of London and the Middle East (BLME)

Premier Deposit AccountGo to Site

2.25% AER
  • £25,000 minimum deposit
  • Rate fixed for three years
  • Further additions, withdrawals and early access not permitted
  • Postal-operated
  • Interest paid on anniversary 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 secures second place with this account that pays an expected profit rate of 2.25%. It's only available to those with at least £25,000 to invest, and they must also be willing to open a linked current account, but for those with a decent savings pot it could be ideal.


AER
Details

NS&I

NS&I

Investment Guaranteed Growth Bond

2.20% AER

  • £100 minimum deposit up to a maximum of £3,000
  • Rate fixed for three years
  • No further additions
  • Withdrawals permitted on 90 days' loss of interest
  • Internet-operated
  • Interest paid on anniversary and must be compounded

Just making the top three is the Guaranteed Growth Bond from National Savings & Investments, an account that pays 2.20% from a minimum investment of £100. It doesn't permit further additions, but withdrawals are allowed, subject to a 90-day loss of interest penalty. It should be noted that savers can only invest a maximum of £3,000, but it could be perfect for those with a small savings pot, particularly given the Government backing.


AER
Details

Axis Bank

Axis Bank

Fixed Deposit AccountGo to Site

2.16% AER

  • £1,000 minimum deposit
  • Rate fixed for three years
  • No further additions, withdrawals or early access
  • Access via nominated current account
  • Can be opened online or in branch before becoming branch and postal-operated
  • Interest paid on maturity

Next up is this account from Axis Bank that pays 2.16% on a minimum investment of £1,000. It's a simple, straightforward account that doesn't permit further additions or any form of early access, so careful consideration of the three-year commitment is again essential.


AER
Details

Atom Bank

Atom Bank

3 Year Fixed Saver

2.15% AER

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

Digital-only Atom Bank secures fifth place with this deal that pays 2.15% from a minimum of just £50. It allows further additions for another seven days if you're not quite sure of your initial investment, but early access still won't be possible. It should be noted that this account can only be opened and operated by mobile app, but for those happy with digital banking, it could be a great option.


AER
Details

Shawbrook Bank

Shawbrook Bank

3 Year Fixed Rate Bond Issue 40

2.15% AER

  • £5,000 minimum deposit
  • Three-year bond
  • Further additions allowed while issue remains open
  • No withdrawals or early access
  • Must be opened online but can then be operated by phone as well
  • Interest paid on anniversary

Just squeezing into the top six is this account from Shawbrook Bank, a three-year deal that pays 2.15% from a minimum deposit of £5,000. Fairly unusually in this sector, further additions are permitted for a limited time, but no access to funds will be allowed before the end of the three-year term.

Information & Rates correct as at: 21/09/2017

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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