Looking for a bit of extra security when it comes to your cash, but don't want a long-term commitment? That's where a short-term bond could come in. This kind of account 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.
Short-term bonds can give guaranteed returns without asking you to lock your money away for too long. Consider that with most providers still keeping quiet, it may well take a year and a half for savings rates to rise as fast as base rate, especially if you don't have a competitive account. If you don't have a look and maybe switch to one of the top rates, you could be missing out in the meantime.
However, it's important to be aware of the restrictions associated with these kinds of savings accounts. Most won't let you make further additions, and earlier access (if permitted) could 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've got 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 ideal solution.
To get you started, here are the top six short-term bonds bonds currently on the market, all of which have terms of between 12 and 18 months:
Wyelands Bank takes the top spot with this one-year bond, which pays the market-leading rate of 2.15% to those with at least £5,000 to invest. While it allows further additions for a limited time, as usual withdrawals are not permitted until the full term is up on this internet-based account.
In second place sits BLME, with the joint top anticipated profit rate of 2.10% over 18 months for those who can put in at least £10,000. This bond requires interested savers to open a BLME current account, if they don't already have one, but could be an especially appealing choice for those who don't want their cash used to fund weaponry or gambling, due to its Sharia'a compliant nature.
Completing the top three is Investec Bank plc, which also pays the joint market-leading rate of 2.10% over 18 months. Savers will require a pot of at least £25,000 as well as an easy access account with the same provider, but this could well be worth it considering its rate.
Next up is Charter Savings Bank, with another 18-month bond, this one paying a fixed rate of 2.06% on a minimum of £1,000. As additional deposits are allowed for two weeks after you open the account, savers can enjoy a short window of opportunity for those not sure yet how much they feel comfortable investing. As usual, however, no early access is allowed.
In fifth place sits Atom Bank, with a one-year bond that pays 2.05% from as little as £50. While additions are allowed for a little while, early access is not, and savers will want to be comfortable using the bank's mobile app before signing up
BLME completes the top six with its second account in the chart. This time, it's the 12-month version of its Premier Deposit Account, which pays an expected profit rate of 2.05% on at least a £10,000 deposit. Its other features mirror the 18-month version, making this a welcome alternative for those who like BLME but don't want to commit to a longer term.
Information and rates correct as at: 09.08.2018