6 of the best two-year bonds

Category: Savings
Author: Lieke Braadbaart
Date: 30/08/2018

Fixed rate bonds remain the best way to secure a guaranteed return on a large pot of savings, yet in light of the ongoing economic uncertainty, you may be reluctant to tie up your money for too long. A two-year deal could be the perfect compromise.

This kind of account can be ideal if you're saving up for something specific (such as a wedding, a new car or a once-in-a-lifetime holiday) 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 next few years and you don't want to keep your money out of arm's reach for too long. After all, there's no telling what will happen to savings rates, despite this month's base rate rise. So, if you want to secure growth-generating returns without too much commitment, a short-term bond could be just the thing.

These accounts offer the best of both worlds as far as savings are concerned: a decent rate and the peace of mind in knowing that you'll be able to access your cash in around two years' time. Just bear in mind that you'll rarely be able to make further additions after your initial deposit and earlier access usually won't be possible, so you'll need to be comfortable with your investment and the term.

If this sounds like the kind of short-term bond for you, read on for the best two-year deals currently available that can offer a great rate with minimal commitment.

	AER	Details
Secure Trust Bank 2 Year Fixed Rate Bond (16.9.20)	2.26%	£1,000 minimum deposit Rate fixed until 16.09.2020 Additions of at least £1,000 welcome while the issue remains open No withdrawals or early access allowed Must be opened online, but can then also be operated by phone Interest paid yearly

Secure Trust Bank sits proudly in first place with the market-leading rate of 2.26%, which requires a minimum investment of £1,000. While you won't be able to access your funds before the end date, it does allow additions for some time, which could make this top deal all the more appealing.

	AER	Details
Tandem Bank Tandem 2 Year Fixed Saver	2.25%	£1,000 minimum deposit Rate fixed for two years Additions, withdrawals and early access not permitted Internet-operated Interest paid on the anniversary of the account opening and must be paid away

In second place sits Tandem Bank, with its two-year deal paying a near market-leading rate of 2.25%. It also requires £1,000 to be opened, but as usual for this sector access is not allowed before the end of the term.

	AER	Details
Investec Bank plc 2 Year Fixed Term Deposit	2.25%	£25,000 minimum deposit Rate fixed for two years No additions, withdrawals or early access Can only be opened online, but then managed over the phone as well Linked product: requires Investec Easy Access Account for transactional purposes Interest paid on anniversary and must be paid away

Investec Bank plc completes the top three with another deal that pays 2.25%, but this time from a minimum of £25,000. Again, there's no recourse to access the funds prior to maturity, and note that this account will first require you to open an easy access account with the provider. However, given the near market-leading rate and deposit requirement, you could find yourself with a very welcome interest bonus each year – ideal for some late-summer shopping.

	AER	Details
Axis Bank UK Ltd Fixed Deposit Account	2.24%	£1,000 minimum deposit Rate fixed for two years Further additions, withdrawals and early access not permitted Access via nominated current account Can be opened online and in branch, and then operated in branch and by post Interest paid when it suits (choice between monthly, quarterly, annually and on maturity)

Next up is Axis Bank UK, with its two-year deal paying a rate of 2.24% on a minimum of £1,000. Access is not allowed before the two years are up, so interested savers would have to make sure they are happy with their initial deposit before committing. However, they do have the welcome option of getting interest paid when they desire, which could make this an excellent choice for those who want an income from their savings.

	AER	Details
Masthaven Bank 30 Month Flexible Term Saver	2.23%	£500 minimum deposit Rate fixed for 30 months Additions allowed for seven days after account opening via a nominated account No withdrawals or earlier access Internet-operated Interest paid on its anniversary

In fifth place is a 30-month deal from Masthaven Bank, which pays 2.23% on a minimum deposit of £500. Additions are allowed for a short time after the account has been opened, but early access, as usual, is not. This could be a great choice for those who aren't sure how much they want to commit straightaway, or for savers whose goal is still 30 or more months away.

	AER	Details
Birmingham Midshires BM Internet 2 Year Fixed Rate Bond	2.20%	£1 minimum deposit Rate fixed for two years No additions allowed Earlier access possible subject to a penalty of 180 days' loss of interest in the first year and 90 days' loss in the second year Internet-operated Interest paid on its anniversary

Completing the top six is this deal from Birmingham Midshires, which pays a rate of 2.20% over two years on an investment of just £1. It's the only account in this list that offers the possibility of early access should you need it, although this will come with quite a hefty interest penalty.

Information and rates correct as at: 30.08.2018