Savers may be wary locking their money into a long-term fixed rate bond, especially as inflation is predicted to keep rising over the coming months, but keen to benefit from higher bond rates many may be willing to take a short-term inflation hit by locking into a short-term bond.
The good news for these savers is that short-term bond rates have recently become increasingly competitive. For example, our research has found that the average one year fixed bond rate has increased from 0.44% in May to 0.48% this month. This competitiveness can also be seen at the top of the short-term bond charts, with higher top rates entering the chart over the last few weeks.
Today, for example OakNorth Bank increased the rate on its 18 month fixed rate bond Fixed Term Deposit, resulting in it now topping the chart paying 1.04% AER. This account can be opened with a £1 minimum deposit and can be opened and managed online and via mobile app. OakNorth Bank also has a highly competitive 15 month option of this bond, which pays 1.02% AER and has the same terms and conditions as the 18 month version.
The next best 18 month bond rate is 1.02% AER, which is paid by Shawbrook Bank on its 18 Month Fixed Rate Bond Issue 24, which requires a £1,000 minimum deposit to open. The account can be opened online and then managed online and by phone.
Bank of London and The Middle East (BLME) and PCF Bank both have the next most competitive 18 month fixed bond rate of 0.95% AER. BLME pays an expected profit rate of 0.95% AER on its Premier Deposit Account, which must be opened with a minimum deposit of £1,000. The account can be opened online here, and then managed by post. PCF Bank pays this rate on its 18 Month Term Deposit Issue 23, which also requires a £1,000 minimum deposit to open. It must be opened online, but can then be managed online, by post and by phone.
Charter Saving Bank has a competitive rate on its Raisin UK – 18 Month Fixed Term Deposit of 0.93% AER. This account requires a £1,000 minimum deposit to open and benefits from Raisin UK offering a double welcome bonus of up to £100 that can be claimed when a first savings account is opened via its website. As well as this, all successful registrations, funded accounts and renewals carried out between 12 April and 25 June 2021 will be automatically entered into that day’s prize draw to win £100 in cash. Terms and conditions apply for both these incentives. This account can be opened online here and then managed online, by post and by phone.
One year fixed bond rates are currently almost as competitive as 18 month term options. For example, the top one year bond rate is just 0.04% below the top 18 month bond rate, with both Shawbrook Bank and OakNorth Bank paying 1.00% AER on their one year fixed rate bonds.
Shawbrook Bank’s 1 Year Fixed Rate Bond Issue 70 pays 1.00% AER and a £1,000 minimum deposit is needed. It must be opened online but can then managed online and by phone.
Again, OakNorth Bank increased the rate on the 12 month version of its Fixed Term Deposit account today, resulting in it also paying 1.00% AER. It can be opened with a £1 minimum deposit. The account can be opened and managed online and via mobile app.
1 Year Fixed Term Savings from Zopa pays 0.95% AER and requires a £1,000 minimum deposit to open. This account can only be opened online and then managed online or via mobile app.
Also offering a highly competitive rate on a one year fixed rate bond is Gatehouse Bank with its Fixed Term Green Saver which pays an expected profit rate of 0.91% AER. This account also requires a £1,000 minimum deposit to open and can only be opened and managed online.
Bank of London and The Middle East (BLME), Charter Savings Bank and Cynergy Bank all have one year fixed rate bonds paying 0.90% AER. BLME pays an expected profit rate of 0.90% AER on its Premier Deposit Account. To open this account a £1,000 minimum deposit is needed. It can be opened online here, and must be managed by post. Charter Savings Bank pays 0.90% AER on its Fixed Rate Bond and Fixed Rate Postal Bond. Both accounts require a £5,000 minimum deposit to open. Fixed Rate Bond can only be opened online here and managed online, meanwhile the postal version can be opened online here or by post and then managed by post. Cynergy Bank pays 0.90% AER on its Fixed Rate Bond which requires a £10,000 minimum deposit to open. It must be opened online but can be managed online, by post and by phone.
Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme (FSCS) up to a maximum level of protection of £85,000 per person per institution. All new savings or bank accounts provided to UK customers are now covered by the FSCS.
Quick links are where we have an arrangement with a provider so you can move directly from our site to theirs to view more information and apply for a product. We also use quick links where we have an arrangement with a preferred broker to move you directly to their site. Depending on the arrangement we may receive a modest commission either when you press a 'Go to Provider' or 'Speak to a Broker' button, when you call an advertised number or when you complete an application.Disclaimer
All rates subject to change without notice. Please check all rates and terms before investing or borrowing.
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. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.