News

6 of the best three-year bonds
Category: Savings
02/03/2018

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
Vanquis Bank
Vanquis Bank
Vanquis Bank Savings
Go to Site
2.25%
AER
  • £1,000 minimum deposit
  • Three-year bond
  • No additions, withdrawals or early access allowed
  • Access via nominated account
  • Must be opened online, but can then be managed by post and over the phone as well
  • Interest paid on anniversary

Vanquis Bank takes the top spot with this account that pays a market-leading 2.25% from a minimum deposit of £1,000. While you'll have to give up access for the entire term, it could very well be worth it to secure this top rate.

AER Details
Masthaven Bank
Masthaven Bank
3 Year Fixed Term Bond
Go to Site
2.21%
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

Masthaven Bank sits in second place with a rate of 2.21% paid on a minimum investment of £500. The flexibility to add funds for a short time could prove tempting, especially for online investors.

AER Details
Ikano Bank
Ikano Bank
Fixed 3 Year Saver
2.21%
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

Next up is Ikano Bank, whose three-year bond also pays 2.21%, 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
Milestone Savings
Milestone Savings
Fixed Term Deposit
Go to Site
2.25%
AER
(expected profit rate)
  • £1,000 minimum deposit
  • Fixed rate for three years
  • No additions or early access
  • Must be opened and operated online
  • Interest paid on anniversary and must be paid away
  • Sharia'a compliant

Milestone Savings secures fourth place with this deal that pays an expected profit rate of 2.21% from a minimum of £1,000. As a Sharia'a compliant account, it is ideal for those who like to invest ethically. However, with neither additional deposits nor early access to funds allowed, it must be decided from the outset exactly how much can be invested and left untouched for three years.

AER Details
Atom Bank
Atom Bank
3 Year Fixed Saver
2.20%
AER
  • £50 minimum deposit
  • Three-year bond
  • Additions allowed for one week
  • Early access not permitted
  • Access via nominated account
  • Interest paid on anniversary
  • Must be opened and operated by mobile app

Next up is a three-year bond from Atom Bank, which pays 2.20% AER. There is a low deposit requirement of £50, additions are welcome for a week after opening, but access prior to maturity is not allowed. As the bond can only be opened and operated by mobile app, it is one for the tech-savvy only.

AER Details
National Savings & Investments
NS&I
Investment Guaranteed Growth Bonds Issue 1
2.20%
AER
  • £100 minimum deposit; £3,000 maximum deposit
  • Three-year bond
  • No additions allowed
  • Early access on 90 days' loss of interest
  • Must be opened and operated online
  • Interest paid on anniversary and must be compounded

Completing the top six is this account from NS&I, which pays 2.20% on a minimum investment of £100. Additional deposits are not allowed, but funds can be accessed early with an interest penalty. It should be noted that no more than £3,000 can be paid into this bond and that it is online only. Nevertheless, the cast-iron depositor protection guarantees that come with NS&I accounts will always sway the argument for certain savers.

Information & rates correct as at: 01/03/2018

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.