Bonds Look Good for Savers
It is now possible to get more than 5% interest on your savings. Interest rates on fixed rate bonds have rocketed up with the Scottish Widows now paying 5.15% if you’re prepared to invest in a five year bond. They are not the only ones, there are now many other banks and building societies providing rates of interest of more than 5%.
Even the medium-term, two or three year fixed rate bonds are paying decent rates at the moment. If you don’t want to tie your money up for quite so long, you can still receive 4.7% on a three year bond from the barnsley building society.
Bonds are a low risk option, so you know you will get your money back - you put your money in with the chosen bank or building society, accept the rate of interest and leave it there for a period of time. The longer you agree to leave it, the higher the rate of interest you will receive.
Many accounts are very flexible regarding how much or how little money you can invest too, with some allowing you to take out a bond with as little as £1 while, if you have the money, you can usually invest up to £2million or more.
While most of us will be somewhere in the middle, do be aware that many bonds do not allow you to draw your money out early while many others will charge you hefty penalties if you do.
However rates are incredibly high at the moment in comparison with the Bank of England’s interest rate, so if you have money to invest, now is a good time to take advantage of guaranteed high rates without the volatility of the stock market.