Getting the best return on your savings isn’t always straight forward and can involve placing your money into several different products. The majority of savings accounts usually offer the best rates of interest, but they usually have a relatively low threshold or maximum balance .
Fixed rate bonds offer a dependable return on your savings in exchange for not being able to access your money for the term of the bond. They usually have a much higher maximum amount on which they will pay interest compared to savings accounts, so are great for those with more significant savings.
Most banks and building societies offer fixed term bonds that run for 1 year, 2 years, 3 years or 5 years and you will generally earn a higher rate of interest the longer the term of the bond is. You may be able to take money out before the bond matures in exchange for giving up some of your interest payments.
Fixed rate bonds can be an excellent way of getting more out of your money, especially if you are concerned about your savings losing real world value due to the effects of inflation. They can be set up in parallel to your existing current account so should not impact on your regular banking processes.
Compare Coventry fixed rate bonds
The Coventry Building Society provide a range of different savings accounts aimed at different types of customers. Some of their most popular products, which offer an alternative to fixed rate bonds, are their fixed rate ISAs. These also offer a guaranteed interest rate in exchange for locking your money away for a set period.
The key difference is that the interest you earn on a fixed rate ISA is tax-free up to a set yearly limit (£20,000 for the current tax year). This makes taking out an ISA a sensible choice for at least part of your savings. Find out more about ISAs here.
Getting the best deal on fixed rate bonds
Banks and building societies change their products and the interest rates and features they offer with them on a regular basis. This is to reflect the ever shifting market and customer demand.
This can make it difficult to know what are the best deals on fixed rate bonds currently available, leaving it harder to choose the right product for you. Our comparison table above is constantly updated with the most attractive offers on the market, taking the hassle and confusion out of the decision-making process.
If you are going to invest in a fixed rate bond, make sure you have a clear idea of the return you would like to achieve and your likely financial circumstances over the term of the bond. This should help to ensure that you end up with a deal that works for you.
