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Five minute finance: Fixed rate bonds

Five minute finance: Fixed rate bonds

Category: Savings

Updated: 21/09/2009
First Published: 21/09/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Savers are being encouraged by the banks and building societies to lock their money away for a fixed period, rather than placing it in an easy access account, according to

Over the last six months the average rate offered on fixed rate bonds has increased from 2.87pc to 3.53pc, with the highest bond rate on offer now more than 2.00pc above that available on an easy access account.

Ongoing problems in the money markets means providers are keen to get you to tie up your money as they are using their savings books to fund their lending activities.

Market leading bonds from YBS

Yorkshire Building Society has just launched a market leading 3 Year Fixed Rate Bond paying 4.65pc. Savers can invest between £100 and £2m into the bond, with further additions permitted whilst the bond remains open. The bond matures on 31 December 2012, but access to funds is not available during the term of the deal. The society has also launched a five year bond paying 5.30pc.

Head online for top bond rates

This week sees Bradford and Bingley launching its new 2 Year eBond paying 4.35pc. Savers can invest between £10,000 and £2m into the bond, which has a monthly interest option available for those looking for a regular income. The bond matures on 1 October 2011, but once opened, further additions and earlier access are not permitted.

New fixed rates from Barnsley

Barnsley Building Society has just launched two new fixed rate bonds paying 4.00pc to savers who commit funds for two years or 5.00pc for a four year commitment. Savers can invest between £100 and £2m into the bonds, which come with the option of monthly interest. Further additions are permitted whilst these issues remain open, but no early access to funds is available during the term.

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 Any products featured may be withdrawn by their provider or changed at any time.