The Best Six-Month Fixed Rate Bonds | moneyfacts.co.uk
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Derin Clark

Derin Clark

Online Reporter
Published: 06/05/2020

While savers might be reluctant to lock their money into a fixed term bond for even just one year, there is the option of six-month bonds, which often offer more competitive rates than easy access accounts and require money to be left untouched for a short amount of time.

The top rate currently being offered on a six-month bond is 1.45% gross, which is 0.25% higher than the current top rate being offered in the easy access chart where the best rate is 1.20% gross. To give an idea of the difference this will make to interest earned on savings, if £10,000 was deposited into the highest paying six-month fixed rate bond, during the six months £72.50 in interest would be earned, whereas if the same deposit was left in the highest paying easy access account for six months, savers would earn £60 in interest.

The top paying six-month fixed rate bonds

Top rate available on a six-month fixed rate bond currently comes from Vanquis Bank, which pays 1.45% gross on anniversary on its Vanquis Bank Savings. This bond requires a minimum opening deposit of £1,000. It can only be opened online but can then be managed online, by post and by phone. There is also a version of this account that pays interest monthly at a slightly lower gross rate.

The next best six-month bond rate comes from Zenith Bank (UK) Ltd which pays 1.35% gross on maturity on its Raisin UK – 6 Month Fixed Term Deposit. To open this account a £1,000 minimum deposit is needed. It must be opened online, but once opened can then be managed by post, by phone and online.

Both Bank of London and The Middle East (BLME) and QIB (UK) offer six-month bonds that pay 1.30% gross on maturity. BLME pays an expected profit rate of 1.30% on its Premier Deposit Account, which requires a £1,000 minimum deposit to open. This account can only be opened online and must be managed by post. Savers should be aware that to open this account a BLME transfer account is needed to hold funds pending investment. QIB (UK) pays an expected profit rate of 1.30% on its Raisin UK – 6 Month Fixed Term Deposit. A minimum deposit of £1,000 is needed to open this account which can only be opened online. Once open it can be managed by post, by phone and online.

 

Top six-month fixed rate bonds

Provider Account Rate (AER)
Vanquis Bank Vanquis Bank Savings 1.45%
Zenith Bank (UK) LTD Raisin UK – 6 Month Fixed Term Deposit 1.35%
Bank of London and The Middle East Premier Deposit Account 1.30% (expected profit rate)
QIB (UK) Raisin UK – 6 Month Fixed Term Deposit 1.30% (expected profit rate)

Should you choose a six-month bond?

A six-month bond is a good option for savers wanting to benefit from the higher interest rates paid by fixed rate bonds, but who do not want to lock their money away for a year or more. Savers should be aware, however, that once opened the majority of six-month bonds will not allow savers to access their funds during the six-month period, as such they should be confident that they will not need their savings during these months.

For savers who are reluctant to lock their money into a fixed rate bond, a notice account could be a good alternative. Currently the highest paying notice account is being offered by ICICI Bank UK which pays 1.59% gross on both its Raisin UK – 95 Day Notice Account and its HiSAVE Notice Savings Account. The drawback with these accounts is that the Raisin UK – 95 Day Notice Account, which requires a minimum opening deposit of £1,000, only allows withdrawals of the full account balance subject to 95 days’ notice and account closure, while the HiSAVE Notice Savings Account has opening restrictions.

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.

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