Leanne Macardle

Leanne Macardle

Editor
Published: 17/01/2019

The Consumer Prices Index saw a welcome drop to 2.1% in December, according to the latest statistics from the ONS, which means savers now have plenty of options if they're looking for an account that can beat it. You needn't even lock your money away for that long – it's possible to match inflation with this one-year bond from Gatehouse Bank, and there are 82 deals that pay more than 2.1%, including several 18-month, two-year, three-year and four-year options.

That said, to secure the best possible returns, you'll still need to look to longer-term deals. These will always pay the highest rates in the standard savings market for the simple reason that they require more of a commitment, but the rates available could be more than worth it.

That's not the only motivation to lock your funds away over the long term, of course. Fixing your rate for five to seven years could also benefit those with a long-term goal in mind, as you won't have to think about your funds in the meantime – and you can't get tempted to spend the money either.

There are naturally some restrictions to these bonds, with early access often not possible, or only on a big penalty. You also likely won't be able to add funds to the account later on, which is why these bonds tend to appeal more to those with a sizeable savings pot they'd like to set aside. If this sounds like you, then read on to find the top inflation-beating fixed rate bonds that can give you the best returns possible.



AER Details
Bank of England and Middle east
Bank of London and The Middle East
Premier Deposit Account


2.75%
(anticipated profit rate)
  • £1,000 minimum deposit
  • Rate fixed for seven years
  • No additions, withdrawals or early access allowed
  • Linked product: requires a BLME current account to hold funds pending investment
  • Can only be opened online, and then becomes purely phone-operated
  • Interest paid on the anniversary of the account opening and must be paid away
  • Sharia'a compliant

Bank of London and The Middle East (BLME) takes the top spot with an inflation-beating anticipated profit rate of 2.75% fixed for seven years, making it the undisputed leader in the fixed bond market. The account, which requires a minimum of £1,000 and asks savers to open a linked current account, does not allow any access prior to maturity, but the return on offer could easily make up for this.

 

AER Details
Atom Bank
Atom Bank

5 Year Fixed Saver
2.70%
  • £50 minimum deposit
  • Rate fixed for five years
  • Additions welcome for one week from account opening
  • No withdrawals or early access allowed
  • Can only be opened and operated by mobile app
  • Interest paid on the anniversary of the account opening

In second place is this app-only account from Atom Bank, which pays the joint market-leading rate over five years of 2.70%, still well above inflation. This account allows additions for a limited time, but no access, so savers will want to be certain they've got the right deal before they agree to set their funds aside for the whole term – and they'll need to be tech-savvy, as the account can only be opened and operated via smartphone app.

 

AER Details
Vanquis bank logo
Vanquis Bank

Vanquis Bank Savings
2.70%
  • £1,000 minimum deposit
  • Rate fixed for five years
  • No additions, withdrawals or early access allowed
  • Must be opened online, but can then be operated over the phone and by post as well
  • Interest paid on the anniversary of the account opening

Vanquis Bank completes the top three with another account that pays 2.70% for those willing to lock away their money for five years. The typical access restrictions apply, but for those who don't mind being tied in and have at least £1,000 to invest, this could be a great inflation-beating option.

 

AER Details
Bank of England and Middle East
Bank of London and The Middle East
Premier Deposit Account
2.70%
(anticipated profit rate)
  • £1,000 minimum deposit
  • Rate fixed for five years
  • No additions, withdrawals or early access allowed
  • Linked product: requires a BLME current account to hold funds pending investment
  • Must be opened online, but then becomes purely phone-operated by post and phone
  • Interest paid on the anniversary of the account opening and must be paid away
  • Sharia'a compliant

BLME does it again with a second account making the chart. This time, it's the five-year version of its Premier Deposit Account, which also pays the joint market-leading anticipated profit rate of 2.70% over five years on a minimum deposit of £1,000. The same restrictions and linked account requirements apply as with the seven-year alternative, making this an excellent choice for those who don't want to stash their savings for more than half a decade.

 

AER Details
Gatehouse bank logo
Gatehouse Bank
(via Raisin UK)
5 Year Fixed Term Deposit
2.68%
(anticipated profit rate)
  • £1,000 minimum deposit
  • Rate fixed for five years
  • Additions permitted for five working days from account opening
  • No withdrawals or early access allowed
  • Must be opened online, but can then also be managed by phone and post
  • Interest paid on its anniversary and must be paid away
  • Bonus incentive available depending on investment
  • Sharia'a compliant

Taking up fifth place is Gatehouse Bank, which offers a near market-leading five-year fixed rate bond paying 2.68% on a minimum of £1,000. Additions are allowed for a little while, but as is common, access is not. However, the incentive of a bonus separate from the interest rate could sway savers, with up to £100 on offer depending on the amount invested. Note that this account operates under Islamic finance principles, which means the rate displayed is the expected profit rate.

 

AER Details
Ikano Bank logo
Ikano Bank
Fixed 5 Year Saver
2.62%
  • £1,000 minimum deposit
  • Rate fixed for five years
  • Additions welcome within 14 days of the account opening
  • No withdrawals or early access allowed
  • Can only be opened and operated online
  • Interest paid on the anniversary of the account opening and must be compounded

Completing the top six is Ikano Bank, with a bond that pays a still inflation-beating 2.62% over five years on a minimum investment of £1,000. This is another account that allows additions for a limited period, but no other access, so savers will want to make sure they are happy to lose access to their funds for the entire term.

Information and rates correct as at: 17.01.2019

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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