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6 of the best two-year bonds

6 of the best two-year bonds

Category: Savings

Updated: 28/12/2017
First Published: 28/12/2017

Fixed rate bonds are still the best way to secure a guaranteed return on your savings, but given ongoing economic uncertainty, you may be reluctant to tie up your money for too long. That's where a short-term bond can come in, and 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 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 out of arm's reach for years on end. After all, there's no telling what will happen to savings rates or when the Bank of England might decide to increase base rate again. This means that, if you want to secure growth-generating returns without too much of a 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 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 two-year 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

Bank of London and the Middle Ease

Bank of London and the Middle East (BLME)

Premier Deposit AccountGo to Site

2.10% AER

  • £25,000 minimum deposit
  • Rate fixed for two years
  • Further additions, withdrawals and early access not permitted
  • Must be opened online before becoming 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 comfortably takes the top spot with this two-year deal that pays an expected profit rate of 2.10%, making it the market-leader of this sector. It's only available to those with at least £25,000 to invest and you'll have to open a linked current account in order to qualify, but if you've got a healthy savings pot this could be an ideal short-term home for your funds.

AER
Details

Masthaven Bank

Masthaven Bank

30 Month Flexible Term SaverGo to Site

2.08% AER
  • £500 minimum deposit
  • Rate fixed for 30 months
  • Further additions allowed for seven days after account opening via nominated account
  • No withdrawals or early access
  • Online-only account
  • Interest paid on anniversary

Masthaven Bank takes second place with this online-only bond which pays 2.08% from a minimum investment of £500, provided you're willing to put your money aside for a slightly longer 30 months. It even permits further additions for seven days after account opening, but just bear in mind that earlier access won't be possible.


AER
Details

Paragon Bank

Paragon Bank

2 Year Fixed Rate Savings Account

2.05% AER

  • £1,000 minimum deposit
  • Rate fixed for two years
  • Further additions allowed for five days from initial funding
  • No withdrawals or early access
  • Online-only account
  • Access via nominated current account
  • Interest paid on anniversary

Paragon Bank just makes the top three with this deal that pays 2.05% from a minimum investment of £1,000. As is common in the sector, it doesn't permit access prior to maturity, but you can add more funds for a limited time. It can only be opened and managed online.


AER
Details

Union Bank of India

Union Bank of India (UK) Ltd

Term Deposit

2.05% AER

  • £1,000 minimum deposit
  • Rate fixed for two years
  • No additions, withdrawals or earlier access
  • Can be opened and operated in branch and by post
  • Interest paid yearly and must be paid away

Next up is this two-year deal from Union Bank of India which pays 2.05% AER. It requires a minimum investment of £1,000 with no early access allowed, but it can be opened in branch or by post, giving you a couple of management options.


AER
Details

Axis Bank

Axis Bank UK Ltd

Fixed Deposit Account

2.04% AER

  • £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 or in branch, before becoming branch and postal-operated
  • Interest paid on maturity

Axis Bank secures a place in the top five with this two-year deal that pays a fixed rate of 2.04% on a minimum investment of £1,000. The usual restrictions apply, with neither further additions nor early access permissible, so savers will need to be happy with both their investment and the term.


AER
Details

Al Rayan Bank

Al Rayan Bank

Fixed Term Deposit

2.02% AER

  • £1,000 minimum deposit
  • Rate fixed for 24 months
  • No additions, withdrawals or earlier access
  • Can be opened and operated online, over the phone, in branch and by post
  • Interest paid quarterly
  • Sharia'a compliant account

Just squeezing into the top six is this deal from Al Rayan Bank, a 24-month bond that pays an expected profit rate of 2.02% AER (2.00% gross) from an initial investment of £1,000. It may have the lowest rate of this top six, but it also has the most account management options, making it a competitive choice for those who would prefer some flexibility.

Information & Rates correct as at: 28.12.2017

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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