The top fixed rate savings bonds
When it comes to savings accounts, many of us prefer the option of an easy access savings account because, that way, we don't have to worry should we need to get our hands on our cash in an emergency.
In this article, we've only included bonds that you can open with £5,000 or less.
We've also excluded bonds that come with strings attached - for example, you have to open a current or savings account with the provider to get the bond.
Finally, all of the bonds listed are with providers who participate in the Financial Services Compensation Scheme, which guarantees the first £85,000 of your savings should the provider go bust.
So let's take a look at the best bonds out there at the moment.
One year bonds
So here are the current top-paying one year fixed rate bonds that you can open with relatively low minimum deposits:
|United National Bank 1 Year Fixed Deposit||3.45%||£2,000||Online, branch, post|
|Allied Irish Bank 1 Year Bond||3.40%||£1,000||Phone, post|
|Melton Mowbray BS Jubilee Fixed Rate Savings***||3.30%||£1,000||Branch, post|
|Post Office 1 Year Online Bond Issue 11||3.27%||£500||Online|
**Term ends on 20 June 2013
***Term ends on 30 June 2013
Two year bonds
If you'd prefer to opt for a two year bond, here are the best low deposit options:
|Allied Irish Bank (GB) 2 Year Fixed Rate Bond||3.70%||£1,000||Phone, post|
|Post Office Growth Bond Issue 16||3.61%||£500||Online, phone, post|
|BM Savings 2 Year Fixed Rate||3.60%||£1||Post|
|Tesco Bank 2 Year Fixed Rate Saver||3.60%||£2,000||Online, phone, post|
Of course, this isn't a significant increase in interest, so you may need to weigh up whether you think this extra is worth it versus having your money tied up for longer.
Three year bonds
Now let's now take a look at how three year bonds are shaping up.
|Yorkshire Bank Term Deposits||3.90%||£2,000||Online, phone, post|
|Halifax 3 Year Fixed Online Saver||3.85%||£500||Online|
|Progressive BS Limited Issue 3 Yr Fixed Rate Bond Issue 18||3.80%||£500||Branch, post|
|Governor Money Saffron BS 3 Year Fixed Rate Savings*||3.75%||£100||Online|
|Post Office 3 Year Online Bond Issue 7||3.72%||£500||Online|
Here, the top interest rate is 3.9% - but that's only 0.20% more than you'd get with the Allied Irish Bank.
That said, an interest rate of 3.9% does look significantly better than the 3.45% you'd get with a one year bond. So again, you need to decide whether you're happy to lock up your funds for three years in order to get a higher rate of interest. And remember, you won't be able to get your hands on that cash until the three-year term comes to an end.
Four and five year bonds
However, if you'd prefer not to worry about switching around your savings after a year or two and you're happy to just let your money sit in your account, earning interest, here is a selection of the best ones:
|BM Savings 4 Year Fixed Rate||4.00%||4 years||£1||Post|
|Governor Money Progressive BS 4 Year Fixed Rate Savings*||4.00%||4 years||£100||Online|
|krbs 4 Year Fixed Rate Bond Issue 3||4.00%||4 years||£500||Branch, post|
|Secure Trust Bank Fixed Rate Bond 5 Year Term||4.45%||5 years||£1,000||Phone, post|
Ultimately, deciding how long to tie up your funds is up to you. And as we've mentioned, you need to weigh up whether the rate of interest you'll be earning is worth locking away your funds for several years.
You should also bear in mind that in the majority of cases, you won't be able to make additional deposits once you've opened your fixed rate bond - so again, this may put you off tying up your funds for too long. As always, make sure you read the terms and conditions carefully.
It's also worth mentioning that, at the time of writing this, interest rates were being cut and products were being withdrawn very quickly after launching. So don't hang around too long if you want to put your money away.
Finally, don't forget about tax-free savings! You can also lock away your money in a fixed rate cash ISA (or opt for an easy access cash ISA if you prefer) and you won't have to pay tax on any interest you earn. So make sure you don't miss out.
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