The best high-value fixed bonds
Robert Powell looks at the best paying bonds for savers with large deposits.
Deciding where to stash a hefty lump of cash can be a tricky call.
One relatively safe receptacle for your nest-egg is a standard savings account. And the good news is, the more cash you have to invest, the higher the interest rate you’ll receive.
The international bank Investec currently has a couple of good fixed rate accounts for those with deposits of £25,000 or more. The one-year fixed term account pays 3.55%, while the bank’s two-year deal pays out at 4.08% gross (that’s 4% AER).
So if you deposited the minimum amount into the one-year account you would earn near on £900 of interest over the year. Lock your cash away in the two-year saver and the earned interest jumps to £1,020.
Investec has also recently released two unique notice savings accounts called High 5 and High 10. The accounts' rates are based on the average of the top five and top ten best-buy accounts as chosen by Moneyfacts, so you can be sure you’re always getting a very competitive rate. Again, the minimum deposit is £25,000. Take a look at this article to find out more.
For one-year fixes, the only accounts that come close to the Investec 3.55% deal are from the Bank of London and the Middle East (BLME) and Allied Irish Bank. BLME’s account is a Sharia-compliant saver (for more on these types of accounts read this article) that pays an Anticipated Profit Rate (the Islamic equivalent of an interest rate) of 3.45%. However the minimum deposit is even steeper than the Investec deal, at a massive £50,000.
Allied Irish Bank’s one-year fixed bond has a lower minimum deposit, at just £1,000, but only pays out at 3.40%.
On the two-year front, BLME trumps Investec offering a 4.05% AER account. But again, you’ll need to have a £50,000 deposit to be eligible for this account.
Allied Irish Bank’s two-year bond comes behind both Investec and BLME with an AER of 3.80%. But again, the minimum deposit limit is significantly lower at £1,000. Halifax’s Two-Year Fixed Online Saver is also worth a look – it pays out at 3.75%, with a minimum deposit of £500.
For those after longer term accounts for large deposits, BLME is again your best bet. The bank’s three-year account offers a rate of 4.30% AER, while the four-year version offers 4.50% and the five-year account offers 4.80%. All have a minimum deposit of £50,000.
Scottish Widows also has a healthy selection of accounts with a slightly lower minimum deposit limit of £10,000. Lock in for three years and you’ll earn 4.00% while the five-year account is priced at 4.60%.
Halifax’s Fixed Online Saver Series also competes well over the long term. The three-year account is priced at 4.00% and the five-year deal at 4.15%. The minimum deposits for these deals are significantly lower at £500.
But if you do decide to lock in for the long term, you should be sure that you definitely don’t need to get at your cash, as if you do decide to make a withdrawal before the end of the fixed period, penalty fees will eat into your accumulated interest.