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Fixed term savings bonds from 1 to 5 years

To get a higher return on your savings, a fixed rate bond is often a smart choice. Savings bonds usually vary in length from 1 year bonds to 5 year bonds. One way of increasing the yield on your money is to go with a fixed rate bond, which guarantees the interest rate you will receive, providing you keep your savings locked in the account for the full term of the bond. The downside of longer term bonds is that you risk base rate rises which may leave you with a lower return on your savings.

1 year savings bonds

1 year savings bonds typically offer higher rates than variable rate or instant access accounts - and you only need to keep your cash locked up for a year. The best one year bond rates offer you a nice compromise between being able to access your money and getting a decent return on it.

2 year savings bonds

If you’re happy to keep your savings locked away for slightly longer, a two year savings bonds can provide a better rate than a 1 year bond. Of course the longer term the savings bond, the greater the risk that you may get caught out if interest rates rise part way through the term. Two year savings bonds are available through a number of providers including the Post Office and the building society Cheltenham & Gloucester, and typically stipulate a minimum deposit of £500, although this varies.

3 year savings bonds

It’s possible to get 3 year fixed rate savings bonds which offer even higher interest than 2 year bonds. If you’re happy to leave your savings tied up for that long, then you’ll see a better return than shorter term bonds. The best 2 year savings bonds can be applied for and operated online, whilst minimum deposit levels are generally similar to 1 and 2 year bonds.

4 year savings bonds

Again, if you fancy putting your money away and leaving it for four years, the interest rate notches up even higher. Just remember that you’re gambling that the base rate and corresponding market variable rates staying low for longer.

5 year savings bonds

At the very top of the fixed rate bond interest tree are the five year savings bonds. Yorkshire Bank and AA Savings are amongst the financial institutions offering competitive rates on 5 year fixed rate bonds. However, it has to be said that even the best 5 year savings bonds are offer only slightly more interest than 4 year bonds, and you’ll have to say goodbye to your cash for an awfully long stretch! But if you go in with your eyes open, you could get a good return on your savings.

Compare the top 1, 2, 3, 4 and 5 year savings bonds

The length of savings bond you go for obviously depends on your financial profile and what other savings you have access to. If there’s a possibility you’ll need the cash part way through the bond term, then you may be better looking at an instant access savings account, or a 1 year savings bond. Much like any other investment product, it’s wise to take your time and seek professional financial advice before going ahead. When you’re happy to commit to a particular bond term, it’s simply down to finding the savings bond that fits your criteria – our fixed rate savings bond comparison tables can help you find the right product in minutes. You can also use this site to compare other types of bond including children’s savings bonds.

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