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 It is now over 6 months old so the content may be out of date.

Tim Leonard

Tim Leonard

Finance Expert
Published: 11/12/2009

Savers who are willing to lock away a sizeable amount of money for anything up to five years, may be best suited to a long term fixed rate bond.

These accounts tend to pay a higher rate of return than their short term counterparts, however as the rate is fixed, savers may be left disappointed if interest rates increase over the duration of the term.

Here are the current top three five year fixed rate bonds.

State Bank of India – New Hi Return Fixed Deposit

This account pays a rate of 5.25% and a monthly interest option is available at 5.12%. A minimum deposit of £10,000 must be made, although there is no maximum amount. No early access or further additions are allowed. Savers must open or have an existing State Bank of India savings or current account. The account can be operated in branch or by post by savers aged 18 and over.

Birmingham Midshires – 5 Year Fixed Rate Bond

Birmingham Midshires' five year bond pays a rate of 5.15%. A monthly interest option is also available at 5.03%. Savers can invest between £1 and £10m. Further additions are allowed whilst the issue is open. Funds can be accessed early, although this is subject to penalties depending on the length of the remaining term, as follows: For up to five years, 365 days' loss of interest will apply; for four years, 320 days'; up to 3 years, 270 days'; up to two years, 180 days' and for one year or less, 90 days' loss of interest. The account can be operated by savers aged 18 and over by post only.

Halifax – Web Saver

This account pays a rate of 5.15%. Investments range from £500 up to £9m. Early access and further additions are not allowed. Savers must have open or have an existing variable rate Web Saver account. The account can be operated by savers online only and there are no age restrictions.

Compare long term fixed rate bonds


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