Fixed rate bonds have seen a definite improvement in recent weeks, with average rates rising amid growing competition and a higher number of products available, too. So why not make the most of it? Take advantage of the rate rises with our pick of the top fixed rate bonds, covering all available terms to ensure there's something to suit your requirements.
One-year bond
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Bank of London and the
Middle East (BLME)
Premier Deposit Account
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2.00% AER |
- One-year bond
- £25,000 minimum deposit
- No further additions, withdrawals or early access
- Postal-operated account
- Linked product: savers must have or open a BLME current account to hold funds pending investment
- Interest paid on anniversary and must be paid away
- Sharia'a compliant account
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Top of the one-year bond market is this deal from BLME, a 12-month bond that pays an expected profit rate of 2.00% to those with at least £25,000 to invest. It's a hefty amount to lock away, but the returns could be worth it, particularly as you'll only need to part with your cash for a year.
18-month bond
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Al Rayan Bank
Fixed Term Deposit
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2.06% AER
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- 18-month bond
- £1,000 minimum deposit
- Further additions, withdrawals and early access not allowed
- Account can be opened and operated online, by post, in branch and by phone
- Interest paid quarterly
- Sharia'a compliant account
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If you're willing to part with your cash for a little longer, you can't go wrong with this account from Al Rayan Bank. Paying a market-leading expected profit rate of 2.06%, it asks for a minimum investment of £1,000, and can be managed by several channels for added convenience.
Two-year bond
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Al Rayan Bank
Fixed Term Deposit
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2.22% AER
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- 24-month bond
- £1,000 minimum deposit
- Further additions, withdrawals and early access not allowed
- Account can be opened and operated online, by post, in branch and by phone
- Interest paid quarterly
- Sharia'a compliant account
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Al Rayan Bank is a force to be reckoned with in the short-term bond market, with its two-year deal also the market-leader of its sector. Again, it requires you to lock your investment away for the full term, but given that it offers a rate that's far above the next competitor (Atom Bank's app-operated deal clocks in at 2.10%), it's certainly worth considering.
Three-year bond
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Al Rayan Bank
Fixed Term Deposit
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2.32% AER
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- 36-month bond
- £1,000 minimum deposit
- Further additions, withdrawals and early access not allowed
- Account can be opened and operated online, by post, in branch and by phone
- Interest paid quarterly
- Sharia'a compliant account
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What can we say? Al Rayan Bank has done it again with a three-year deal boasting a market-leading expected profit rate of 2.32% for those with a pot of at least £1,000. This puts it head and shoulders above the competition, which includes the much-hyped Investment Guaranteed Growth Bond from NS&I that pays a paltry 2.20% by comparison.
Four-year bond
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Bank of London and the
Middle East (BLME)
Premier Deposit Account
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2.40% AER
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- Four-year bond
- £25,000 minimum deposit
- No further additions, withdrawals or early access
- Postal-operated account
- Linked product: savers must have or open a BLME current account to hold funds pending investment
- Interest paid on anniversary and must be paid away
- Sharia'a compliant account
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Another provider to lead the way in the fixed rate bond market, this four-year deal from BLME could be just the thing for those seeking a medium-term home for their funds, with a rate of 2.40% payable on deposits of at least £25,000. Just make sure you're happy with your investment and the term, as neither further additions nor early access will be possible before the full four years is up.
Five-year bond
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Atom Bank
5 Year Fixed Saver
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2.50% AER
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- £50 minimum deposit
- Rate fixed for five years
- Further additions allowed for one week from account opening
- No withdrawals or early access
- Account can only be opened and operated via mobile app
- Interest paid on anniversary
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Storming ahead in the five-year market is this deal from Atom Bank, paying a joint market-leading 2.50% from a minimum deposit of just £50. Unusually for this sector of the market, it allows further additions for a limited period, but no withdrawals will be accepted. It's also worth noting that it's only suitable for those comfortable with mobile banking, with this deal being purely app-operated.
Seven-year bond
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PCF Bank Ltd
7 Year Term Deposit
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2.60% AER
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- £1,000 minimum deposit
- Rate fixed for seven years
- Further additions permitted for 14 days from account opening
- Withdrawals and early access not allowed
- Can be opened online or by post and then managed by phone as well
- Interest paid on anniversary and must be paid away
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The top-paying fixed rate bond currently available is this seven-year deal from relative newcomer PCF Bank, paying a market-leading 2.60% to those with at least £1,000 to invest. It's the only deal available that currently won't see your savings eroded by inflation, but you'll need to be willing to lock your money away for the full seven-year term for the privilege, with no earlier access permitted.
Information & rates correct as at: 31/08/2017
