Five of the best short-term bonds

With the current economic uncertainty, many savers are understandably reluctant to lock their money into a long-term fixed rate bond, despite these accounts offering the highest savings rates. This, coupled with the fact that the savings market has seen rates fall throughout the year, means that savers are facing a challenge when looking to deposit their money into an account that offers a good rate. For those who are able to lock money away for the short period of time a short-term bond could be the ideal solution, as they offer savers competitive rates without locking money into the account for five years or more.

Here we have taken a look at five of the best short-term bonds options that are currently available in our fixed rate bond charts.

A one year fixed rate bond is a great option for those who want to benefit from the competitive rates offered by bonds, but who want to be able to access their money after a short period of time. Currently, a number of providers offer the top one year bond rate of 1.85%.

Al Rayan Bank’s Fixed Term Deposit offers an expected profit rate of 1.85% gross, which pays profit quarterly. Bank of London and The Middle East (BLME) also offers an expected profit rate of 1.85% gross on its Premier Deposit Account which pays profit on maturity. Another provider offering an expected profit rate of 1.85% gross is Gatehouse Bank, which offers this rate on its Fixed Term Deposit and pays profit on anniversary. All these accounts require a minimum deposit of £1,000 to open. 

Savers who are able to lock their money away for a slightly longer period will find that 18 month bonds offer highly competitive rates, with the best rate in the chart currently at 2.00% gross.

Al Rayan Bank offers an expected profit rate of 2.00% gross on its Fixed Term Deposit, which pays profit quarterly and requires an opening minimum deposit of £1,000. BLME has the next highest rate, offering an expected profit rate of 1.90% gross on its Premier Deposit Account that pays profit on anniversary and requires a minimum £1,000 to open. Metro Bank offers the third-highest rate in the chart with its Fixed Term Savings Account paying 1.90% on anniversary and it requires a  minimum opening deposit of £500. There is also a version of this account that pays interest monthly at a reduced rate of 1.88% gross for those looking to supplement their income.

Those who are happy to lock their funds into a two year fixed rate bond can choose from a number of accounts offering rates over 2.00%.

Al Rayan Bank again currently has the highest rate overall in this chart with its Fixed Term Deposit offering an expected profit rate of 2.15% gross, which is paid quarterly. Both BLME and Gatehouse Bank offer the second-best rate in the chart, paying an expected profit rate of 2.10% gross on anniversary. BLME pays this on its Premier Deposit Account and Gatehouse Bank pays it on its Fixed Term Deposit. All these accounts require a £1,000 minimum deposit to open.

Savers looking to supplement their income with a short-term bond that pays interest monthly will have to look towards the two year fixed bond chart to get the best rates.

Masthaven Bank pays the next highest monthly rate with its 30 Month Flexible Term Saver paying 1.83% gross also on a £500 deposit. Meanwhile, Aldermore pays a monthly rate of 1.79% gross on its 2 Year Fixed Rate Account, which requires a minimum opening deposit of £1,000.

While those comfortable with online banking will have the most choice when it comes to the highest-paying short-term bond accounts, those who prefer to bank in branch can still find highly competitive rates.

In fact, all versions of Al Rayan Bank’s Fixed Term Deposit, which offers the highest one-year, 18-month and two-year rates paying expected profit rates of 1.85% gross, 2.00% gross and 2.15% gross respectively, can be opened and managed in branch, as well as online, by post, by phone and mobile app. The 18-month version of Metro Bank’s Fixed Term Savings Account pays 1.90% gross can be opened and managed in branch, it can also be opened online and managed online and by phone. Union Bank of India (UK) Ltd has a two year bond that can be opened and managed in branch, as well as by post. This account pays 1.90% gross yearly and requires a minimum opening deposit of £1,000, while there is also a version that pays 1.90% gross on maturity.