Short-term bonds can give guaranteed returns without asking you to lock your money away for too long. This can be ideal if you're planning a big purchase in the next year or so and want the best interest rate possible on a lump sum of cash.
Even if you don't have a specific goal in mind, putting your money away for a year to a year-and-a-half can give you the peace of mind that your savings are gaining a guaranteed rate of interest, without losing access for too long. Additionally, now could be the perfect time for such a decision, as the current economic uncertainty might well last for another year or two.
However, it's important to be aware of the restrictions associated with this type of savings account. Most won't let you make further additions, and earlier access (if permitted) may incur hefty penalties, so you'll need to be happy with both your investment and the term of the bond from the outset. But, if you have a lump sum to invest and are confident you won't need the cash in the foreseeable future, these fixed rate bonds could be the perfect solution.
To get you started, here are the top six short-term bonds currently on the market with terms that fall between 12 and 18 months:
BLME takes the top spot with this 18-month bond, which pays the market-leading anticipated profit rate of 2.25% to those with at least £10,000 to invest. As is common among these accounts, additions and withdrawals are not permitted, while interested savers will also need to open a BLME current account. However, the chart-topping rate could easily make this a worthwhile endeavour.
In second place sits Al Rayan Bank, offering an anticipated profit rate of 2.22% AER (2.20% gross) over 18 months for those with a minimum deposit of £1,000. This bond does not allow additions or early access, but it does give customers plenty of account management options.
Completing the top three is Investec Bank plc, which pays 2.15% over 18 months. Savers require a pot of at least £25,000 and, once again, additions and withdrawals are not allowed with this competitive account, which further requires savers to open an additional easy access account.
Next up is Charter Savings Bank, with another 18-month bond. This deal pays a fixed rate of 2.11% for those who have a minimum of £1,000 to put away, and while withdrawals are not allowed, additions are possible for the first two weeks on this online-only account.
In fifth place sits Masthaven Bank, with another 18-month bond, this time paying 2.05% from a relatively minor initial deposit of £500. While additions are allowed for a little while, early access is again not possible on this online-only account.
Tandem Bank completes the top six with the one and only one-year bond that's made the cut, which also pays 2.05% but on a £1,000 deposit. While there is no possibility of access before the account matures, this online-only bond still offers a strong option for savers with a smaller pot who don't want to set aside their funds for more than a year.
Information and rates correct as at: 22.11.2018