The best fixed rate bonds disappear after a month. So you'll need to move quickly if you want the best rate on your savings.
New research from Moneyfacts has revealed that the length of time a fixed rate bond stays on the market has fallen to just 30 days - the lowest level since December 2008.
Given that the best rate bonds have such a short shelf life savers will need to act fast to ensure their money is in the best home possible. That said, faced with a minefield of options it's hard to know where the best rate is and how long this means you have to be without your money.
To make it a bit easier we've got together the best fixed rate bond deals still available at the moment.
One-year and 18-month bonds
|
Account |
Interest rate (AER) |
Minimum deposit |
|
3.65% |
£1 |
|
|
Cahoot One-Year Fixed Rate Bond (issue 5) |
3.60% |
£25,000 |
|
Chelsea BS Fixed Rate Bond to 31.08.13 |
3.55% |
£1,000 |
|
Yorkshire BS Fixed Rate e-bond to 31.7.13 |
3.55% |
£1,000 |
|
3.50% |
£1,000 |
|
|
3.45% |
£2,000 |
|
|
Sainsbury's Bank One-Year Fixed Rate Saver |
3.40% |
£5,000 |
|
3.35% |
£25,000 |
|
|
Allied Irish bank (GB) Savings Direct One-Year Fixed Rate Bond |
3.20% |
£1,000 |
|
3.00% |
£1 |
The Coventry deal tops this table of short term bonds, but is for a fixed period of 18 months (until the 31st December 2013) so you would need to sacrifice access to your money for slightly longer than the rest.
We talked about the benefits of fixing for this time in this article at the end of June. The bond is still available, but if the Moneyfacts research is to be believed there isn’t much time left. With a great rate for a relatively short amount of time, savers shouldn’t be too cautious as the next best deal requires you to have a £25,000 deposit!
Two-year bonds
|
Account |
Interest rate (AER) |
Minimum deposit |
|
Nationwide Two-Year Fixed Loyalty Bond* |
3.80% |
£1 |
|
AA Two-Year Fixed Rate Savings Account |
3.80% |
£1 |
|
3.75% |
£1,000 |
|
|
3.75% |
£500 |
|
|
Sainsbury's Bank Two-Year Fixed Rate Saver |
3.75% |
£5,000 |
|
3.75% |
£25,000 |
|
|
3.50% |
£2,000 |
|
|
3.35% |
£1,000 |
*Only available to existing customers
If you’re slightly braver and are willing to lock away your cash for two years, then you can score an even better rate of 3.80% with the Nationwide Two Year Fixed Loyalty Bond.
[SPOTLIGHT]However, this rate is only available to existing customers (of 3 months or more) and the maximum balance is limited to £5,000 for sole accounts and £10,000 for joint accounts - not great if you want to try and save more. The upside though is that unlike a lot of other bonds on the market this account allows early closure for a penalty of 180 days interest.So if you're faced with an emergency there is an escape route!
This deal is new to the market but even at this early stage Nationwide warns: ‘This is a limited offer and may be withdrawn from sale at any time without notice.’ Luckily the AA deal offers the same rate for the same minimum deposit of £1, but who knows when this deal will be snapped up and taken off the market!
Three-year bonds
|
Account |
Interest rate (AER) |
Minimum deposit |
|
4.00% |
£1 |
|
|
4.00% |
£1,000 |
|
|
4.00% |
£25,000 |
|
|
3.85% |
£500 |
|
|
Sainsbury's Bank Three-Year Fixed Rate Saver |
3.85% |
£5,000 |
|
3.61% |
£1,000 |
|
|
3.60% |
£2,000 |
|
|
3.50% |
£10,000 |
|
|
3.30% |
£1 |
*Only available to over 50s
For the medium-term bonds of three years, there are three joint table toppers offering a rate of 4.0%. To distinguish it is helpful to look at the minimum deposits required for each. Saga only requires a minimum £1 deposit to access the best rate, but it is only available to over 50s. The Co-operative is the next easiest to access, requiring £1,000 to get started for the top rate, but BLME Sharia’a wants £25,000 from savers for the best return over three years.
Four- and five-year bonds
|
Account |
Interest rate (AER) |
Minimum deposit |
|
4.60% |
£25,000 |
|
|
4.20% |
£25,000 |
|
|
4.06% |
£1,000 |
|
|
4.00% |
£500 |
|
|
4.00% |
£10,000 |
|
|
3.90% |
£500 |
It’s clear to see that giving your savings a longer stint with the bank reaps the best rewards. The BLME Sharia’a five-year bond offers 4.60% but you will need to have a massive £25,000 to deposit in order to get access to this amazing rate.
For most this amount is not really viable as a deposit and the next most affordable rate (with a deposit of £1,000) only offers 4.06% for the same five-year stint . For this offer I think you could risk putting your money away for three years instead, with just 0.06% difference between the next best five-year deal and the table toppers in the three-year table.
What's the hurry?
The fact that savers have been faced with poor value accounts for so long means these are being snapped up very quickly. According to Moneyfacts, before the base rate dropped to a record 0.5% the average time bonds remained available was around 100 days, peaking at 158 days in March 2006. Now the market-leading deals are becoming oversubscribed very quickly, so if you still want to chase the best rate you will need to act fast to avoid the rush.
However, locking your money away isn't a decision you should take lightly. Typically you won't have access to these funds at all with a bond account and if you do there are severe penalties that could see you end up with less than you put in.
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