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Product focus: Long term fixed rate bonds

Product focus: Long term fixed rate bonds

Category: Savings

Updated: 19/02/2010
First Published: 19/02/2010

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 It is now over 6 months old so the content may be out of date.

At present, long term fixed rate bonds are the best place to lock away funds for a good return.

However, it is important to remember that when interest rates increase in the near future, savers could be left disappointed with the prospect of remaining on a lower fixed rate.

Here are the current top three 5 year fixed rate bonds.

AA – Fixed Rate Bond

This account pays a rate of 5.10% on its anniversary. A monthly interest option is also available at 4.98%. Savers can invest between £1 and £5 million and further additions can be made while the issue is open. Early access to funds is allowed, subject to the following loss of interest: with a term remaining of one year or less, 90 days; one to two years, 180 days; two to three years, 270 days; three to four years, 320 days; four to five years, 365 days. The account can be operated by post by savers aged 18 and over.

Halifax – Web Saver

The Halifax Web Saver offers savers a rate of 5.00% on its anniversary. Investments range between £500 and £9 million. Further additions and early access are not allowed. Savers must open or have an existing variable rate Web Saver account. As the name suggests, the account can be operated online only, although there is no age restrictions for savers.

Progressive Building Society – Limited Issue Five Year Fixed Term Bond Issue 11

This account pays a rate of 5.00%. Savers can invest between £500 and £1 million, although those opting for the monthly interest option available at 4.85%, will need to make a minimum deposit of £5,000. Further additions are allowed while the issue is open, although early access is not. The account can be operated in branch and by post, by savers of all ages.

Find the best savings accounts for you: best sellers savings accounts or compare long term savings accounts

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 Any products featured may be withdrawn by their provider or changed at any time.