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High interest savings bonds

In return for locking up your savings with a bank or building society for periods of one year or more, you can get some of the best interest rates available and a great return on your cash. The products are known as high interest savings bonds and give high rates because the bank or building society knows how long it will have your cash for – unlike some savings accounts where you can withdraw your money at any time. High interest bonds normally run for periods of between one and five years, known as the bond term. As a general rule of thumb, the longer the bond term, the higher the interest rate. It also goes without saying, that high interest bonds are only really suitable for savers who know they won’t need access to their money during the bond term.

How to find the top high interest savings bonds

As mentioned, you need to consider how long you can afford to have your savings tied up for. If you’ve got other, more easily accessible savings on deposit then you might be able to benefit from the higher interest rates offered by a 5 year savings bond. The other salient point you might want to consider before opting for a long-term high interest bond, is that interest rates are very likely to shift during the bond term. That means fixing for five years when the base rate is very low could be a bad idea. If you’re at all in doubt about what to do though – always obtain professional financial advice first.

The benefits of high interest savings bonds

Well, the clue is in the name really! Banks like reliable and stable sources of cash, and bonds offer stability. Other advantages of high interest savings bonds are:-

Compare high interest savings bonds

The best interest rates are available on fixed rate savings bonds like 5 year bonds, but as mentioned these have some disadvantages, principally in terms of interest rate risk and the fact they tie up your cash. However, a good compromise may be to choose shorter term high interest bonds to spread your risk. As always with financial products you should take your time and seek professional financial advice if you are unsure about anything. Once you’ve worked out what type of savings bond you want, it’s simply down to finding the bond that meets your criteria – our high interest savings bond comparison tables should help you find what you need in minutes.

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