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Product Focus: Fixed Rate Bonds

Product Focus: Fixed Rate Bonds

Category: Savings

Updated: 26/01/2010
First Published: 12/08/2009

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 It is now over 6 months old so the content may be out of date.

Fixed rate bonds are sometimes perceived as complicated investments, however they are purely savings accounts designed for savers to deposit their funds over a set period of time.

Interest rates for fixed rate bonds tend to be higher than their instant access counterparts, although savers must be committed to locking their cash away for the designated period.

Accessing funds during this time can result in penalties, such as loss of interest or even account closure. Here is a selection of the best long-term fixed rate bonds at present.

West Bromwich Building Society – E Bond 32

This savings bond, fixed for five years pays a rate of 5.45 per cent. Savers can invest between £5,000 and £1 million. Early access and further additions are not permitted. The account is available online only to savers aged 18 or over. A monthly interest option is available at a lower rate of 5.32 per cent.

Barnsley Building Society – Online Bond

This fixed rate bond, another online deal, pays a rate of 5.40 per cent over a five year period. Investments range between £100 and £500,000. No early access is allowed, although further additions are permitted while the issue is open. Savers must be aged 16 or over. There is a monthly interest option, which pays a rate of 5.27 per cent.

Aldermore – 5 Year Fixed Rate Account

Formerly known as Ruffler Bank, Aldermore's five year fixed rate bond pays a rate of 5.40 per cent. Savers must be aged 18 or over and can invest between £1,000 and £1 million. Early access and further additions are not permitted. A monthly interest option with a lower rate of 5.27 per cent is also available. The account can be operated in branch, by either post or telephone and online.

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 Any products featured may be withdrawn by their provider or changed at any time.