News

6 of the best three-year bonds
Category: Savings
17/05/2018

Fixed rate bonds are still one of the best ways to secure a decent return on your cash, but the thought of locking your money away for years on end can understandably be daunting. A suitable compromise could be a three-year bond.

Take a look at the best savings rates and you'll see that there are plenty of medium-term accounts that can help secure growth-generating rates, and three years could be the ideal term. Your returns are guaranteed too, unlike with a variable rate account. However, it's important to be aware of the restrictions.

In particular, most fixed rate bonds won't allow you to make further additions or access your funds early – and if they do they could penalise you heavily – so you'll need to be confident you won't need your chosen investment for the full three years.

You also need to make absolutely certain that you're choosing the best savings account for your needs, and we're happy to help with that! Here are the current top six three-year bonds that could help you secure a decent return.

AER Details
RCI Bank
RCI Bank
Fixed Term
(3 Year)
Go to Site
2.31%
AER
  • £1,000 minimum deposit
  • Three-year bond
  • Additions permitted for 30 days
  • No early access
  • Internet-only
  • Interest paid on anniversary
  • Protected by France Depositor Compensation Scheme

RCI Bank takes top spot with a rate of 2.31% paid on a minimum investment of £1,000. The flexibility to add funds for a short time could prove tempting, but the lack of access to funds should be borne in mind.

AER Details
Vanquis Bank
Vanquis Bank
Vanquis Bank Savings
Go to Site
2.30%
AER
  • £1,000 minimum deposit
  • Three-year bond
  • No additions, withdrawals or early access allowed
  • Must be opened online, but can then be managed by post and over the phone as well
  • Interest paid on anniversary

Vanquis Bank sits in second place with a bond that pays 2.30% from a minimum deposit of £1,000. While you'll have to give up access for the entire term, it could be worth it to secure this rate.

AER Details
BLME
Bank of London and The Middle East
(BLME)

Premier Deposit Account (Anticipated Profit Rate)
Go to Site
2.30%
AER
(expected profit rate)
  • 3-year bond
  • £25,000 minimum deposit
  • No further additions, withdrawals or early access allowed
  • Account can only be opened and operated online
  • Linked product: must have or open a BLME current account to hold funds pending investment
  • Interest paid on anniversary and must be paid away
  • Sharia'a compliant account

Next up is BLME with this three-year bond, which pays an expected profit rate of 2.30% AER to those with at least £25,000 to invest. It requires a linked BLME current account and, as with most other bonds, no further additions are permitted and withdrawals won't be allowed until the full term is up.

AER Details
Ikano Bank
Ikano Bank
Fixed 3 Year Saver
2.26%
AER
  • £1,000 minimum deposit
  • Rate fixed for three years
  • Additions allowed for 14 days
  • Early access not permitted
  • Online only
  • Interest paid on anniversary
  • Protected by Swedish Deposit Guarantee Scheme

Ikano Bank secures fourth place with a bond that pays 2.26%, this time from a minimum investment of £1,000. Additional deposits are allowed for 14 days after opening, but as there are no withdrawals before maturity, savers will have to ensure they won't need their funds for the full three-year term.

AER Details
Hodge Bank
Hodge Bank
3 Year Fixed Rate Account
2.25%
AER
  • £1,000 minimum deposit
  • Rate fixed for three years
  • Additions allowed for 10 days if opened online
  • No early access
  • Can be opened by post or online, and then operated by post and over the phone
  • Interest paid on anniversary

In fifth place is Hodge Bank with a deal that pays 2.25% from a minimum of £1,000. While early access to funds is not allowed, there is some welcome flexibility in how the account can be opened and operated.

AER Details
Tandem Bank
Tandem Bank
Tandem 3 Year Fixed Saver
2.25%
AER
  • 18-month bond
  • £1000 minimum deposit
  • Three-year bond
  • No additions or early access
  • Interest paid on anniversary and must be paid away
  • Must be opened online and operated by phone

Completing the top six is Tandem Bank, which also pays 2.25% AER from £1,000. This time, however, neither additional deposits nor early access to funds are allowed, on a bond which must be opened online and then operated over the phone.

Information & Rates correct as at: 16.05.2018

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.