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Savings Bonds

It’s no secret that financial worries are at the forefront of many people’s minds at the moment. The low Bank of England base rate, combined with high inflation means that for many who rely on growth or regular income from their savings, returns can be disappointing. That’s why it’s more important than ever to make your savings work hard for you, and earn the best possible rate of interest. Savings bonds normally run for a fixed term of between 6 months and 5 years, offering savers the chance to secure a fixed rate of interest for a set amount of time. The best savings bonds can therefore offer stability and predictability – you know what your returns will be, so there’s less need to keep a constant eye on interest rates.

How to find the highest bond rates

When you take out a savings bond, the bank knows how long they’ll have access to your money for, enabling them to plan their investment activities more accurately and therefore offer you a better rate of interest. High interest rate savings bonds come in the form of longer term fixed rate deals, which require you to lock away your capital for longer – so it’s vital to think about whether or not you need to the freedom to access your savings at short notice. If you do, a longer term fixed rate bond may not be right for you.

What types of savings bonds are available?

High interest savings bonds and fixed rate savings bonds essentially fall under the same umbrella – in return for agreeing to lock away your savings with a bank or building society for a year or more, you can normally secure the best bond rates. It follows that in general, the longer you agree to leave your savings with one provider, the better the return will be. However, the downsides to longer term bonds include:-

Children’s savings bonds

University fees, first cars, house deposits – they are all expensive milestones that you might want to put money aside for if you have children. Building a nest egg for your child’s future using children’s savings bonds can also help you educate them about savings and money management, if you involve them in parts of the process like comparing bond rates. Other benefits of children’s savings bonds include:-

NS&I savings bonds and premium bonds

If you are looking for a safe home for your money, National Savings bonds may be a good choice. With 100% of your investment in NS&I bonds guaranteed by the Treasury, national savings are popular amongst UK savers as they offer security and peace of mind. The downside is that NS&I bond rates are generally lower than the interest rates on high street bank and building society savings bonds. Some of the advantages of NS&I bonds include:-

NS&I Premium bonds

Premium savings bonds are the single most popular investment amongst UK savers. With the opportunity to win monthly prizes of up to £1 million, the upsides of NS&I premium bonds could be huge. There is the flipside to this argument though – your actual return compare to other savings bonds could be low if you don’t win a prize. However, with government figures showing that almost half of us in the UK hold premium bonds, it seems we all like the possibility of winning a prize enough to put our money into one. Like other NS&I bonds, they are also totally secure investments.

Compare savings bonds and find the top rates

There’s a lot to think about if you’re looking for the right savings vehicle, and finding the best savings bond comes down to more than just interest rates. Notice periods, withdrawal restrictions and a host of other considerations should come into play if you are comparing savings bonds. To take the hassle out of the process, why not use our free savings bond comparison service – and find the right savings bond in minutes.

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