News

6 of the best long-term bonds
Category: Savings
Date: 12/10/2018

Long-term fixed rate bonds remain the surest way to beat inflation on a large savings pot without risking your hard-earned funds on the stock market. While you currently have to say goodbye to your savings for at least five years to get an inflation-beating return, economic and political uncertainty could make this a great time to seek some fixed bond security.

Such a bond could also be perfect for those with big purchases planned – a wedding or a house deposit, for example. Just remember that you'll rarely be able to withdraw funds before the end of the term, and few bonds allow further additions either, so you'll have to be comfortable with both the level of investment and the term chosen from the outset.

If you're confident you won't need the cash for a number of years and are ready to secure a decent return, it's time to get searching. To help you on your way, here are the current top six long-term bonds that could help you get more from your money.

AER Details
blme
Bank of London and the Middle East
Premier Deposit Account
Go to Site
2.76%
(expected profit rate)
  • £10,000 minimum deposit
  • Rate fixed for seven years
  • No additions, withdrawals or early access allowed
  • Linked product: must have or open a BLME current account first
  • Internet-operated
  • Interest paid on its anniversary and must be paid away
  • Sharia'a compliant account

Bank of London and the Middle East (BLME) takes the top spot with this seven-year deal that pays a market-leading expected profit rate of 2.75% on an investment of at least £10,000. As is common in the sector, early access is not allowed – bear in mind that you will need to open a linked current account for transactional purposes – but the return and security that come with this deal could very well make it worth your while.

AER Details
Ikano Bank
Ikano Bank
Fixed 5 Year Saver
2.70%
  • £1,000 minimum deposit
  • Rate fixed for five years
  • Additions allowed for 14 days after account opening
  • No withdrawals or early access allowed
  • Internet-operated
  • Interest paid on its anniversary and must be compounded

In second place sits this internet-operated deal from Ikano Bank, with a rate of 2.70% paid over five years for those who have a minimum of £1,000 to invest, making it the market-leading five-year bond. Once again, there's no option to access your invested funds early, but further additions are permitted for a limited period, offering a measure of flexibility.

AER Details
Close Brothers Savings
Close Brothers Savings
5 Year Fixed Term Deposit
2.70%
  • £10,000 minimum deposit
  • Rate fixed for five years
  • No further additions or withdrawals
  • Must be opened by post, but can then be managed over the phone as well
  • Interest paid on anniversary and must be paid away

Close Brothers Savings completes the top three with this deal that offers a return of 2.70% over five years. It can be opened with £10,000, though once open no further deposits can be made, and interested savers must be willing to lock away their funds for five years, as early access will not be permitted.

AER Details
blme
Bank of London and the Middle East
Premier Deposit Account
Go to Site
2.70%
(expected profit rate)
  • £10,000 minimum deposit
  • Rate fixed for five years
  • No additions, withdrawals or early access allowed
  • Linked product: must have or open a BLME current account first
  • Internet-operated
  • Interest paid on its anniversary and must be paid away
  • Sharia'a compliant account

BLME does it again with a second account in the chart, this time with its five-year fixed rate bond that pays an expected profit rate of 2.70% to those who have at least £10,000 to set aside. With its other features matching the seven-year offer, this could be a great choice for savers who don't want to fix their savings for more than half a decade.

AER Details
Masthaven Bank
Masthaven Bank
5 Year Fixed Term Bond
2.69%
  • £500 minimum deposit
  • Rate fixed for five years
  • Additions permitted for seven days from account opening via nominated account
  • No withdrawals or early access allowed
  • Internet-operated
  • Interest paid on anniversary

Securing a place in the top five is Masthaven Bank, with another five-year bond that this time pays 2.69% on a lower minimum investment of £500, which could make it more accessible for some. Additions are permitted from a limited period, but as may be expected, earlier access won't be allowed, with the full five-year term always having to be served.

AER Details
Gatehouse Bank
Gatehouse Bank
Raisin UK – 5 Year Fixed Term Deposit
Go to Site
2.68%
  • £1,000 minimum deposit
  • Rate fixed for five years
  • Additions permitted for five working days
  • No withdrawals or early access allowed
  • Must be opened online, but can then be managed by post and phone as well
  • Interest paid on anniversary and must be paid away
  • Sharia'a compliant
  • Bonus of up to £80 available depending on deposit

Bookending the top six is Gatehouse Bank, with its five-year bond paying an expected profit rate of 2.68% on a minimum of £1,000. Available through the Raisin platform, this Sharia'a compliant account allows further additions for five working days from account opening, though withdrawals won't be possible. As an added incentive, saves can earn bonuses depending on how much is invested, starting at £20 for a £10,000 to £19,999 investment and rising to £80 for deposits of £80,000 and over.

Information and rates correct as at: 11.10.2018

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.