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Looking for lost premium bonds? This guide tells you where to start looking.
Essentially a one year fixed bond is likely to offer you a better rate of interest than a simple easy access account. In return for your agreement not to touch the funds for the fixed period of 12 months, the provider can offer you a superior return than those where funds can be withdrawn at will. In most cases, you’ll find that one-year fixed rate bonds will not allow any withdrawals – although you may find one or two that allow you access with an interest penalty. Hence these accounts are perfect for investors who can happily put the funds to one side for the duration of the bond.
A one year fixed rate bond is what’s known as a short-term bond. These offer better returns but do not lock your money away for an extended period. Consequently, they are a useful trade-off between access and obtaining a decent return on your investment.
One year fixed rate bonds are ideal for anyone considering a short-term investment (i.e. anything up to 12 months). A year is a relatively short time to lock your money away, but due to the restrictions on withdrawals, you must be certain that you will not need access to these funds during the one-year duration you have agreed to. If you feel confident about committing to a longer period, you might consider a two year fixed rate bond instead.
A trend in the one-year fixed rate bond market is for the best rates to be offered by smaller, less mainstream banks. These are referred to as challenger banks, however, you should not any have any concerns that your money is any less safe with one of these institutions than with one of the bigger, high street brands. All banks and building societies listed by Moneyfacts.co.uk are part of the Financial Services Compensation Scheme (or an EU equivalent). As such, the first £85,0000 you have saved is fully protected should the bank or building society fail.
Ready to compare today's bond rates? Click below to view the best one year fixed rate bonds at the top of the page.