Fixed-rate savings bonds on the riseRates are at a 13-month high

05 April 2011

Fixed rate accounts

Average rate on one-year bonds is now 2.82%

New research from Moneyfacts shows that high demand for savers' money and expectations of a rise in bank base rate in the near future has pushed short-term fixed-bond rates to their highest level in more than a year.

The average rate on one-year bonds fell to an all time low of 2.52% in August 2010, but has steadily risen since then to reach 2.82% now.

Michelle Slade, spokesperson for, commented: 'Savers prepared to lock their money away have been given a boost as rates on fixed-rate bonds have increased to a 13-month high.

'Rates on fixed-rate bonds have steadily risen since August 2010, when the average rate for a one-year bond dropped to an all-time low of just 2.52%. The biggest increase in rates is on short-term deals, which are the most popular amongst savers.'

Which? Best Rates reveal some excellent deals

Paul Davies, savings analyst at Which, added: 'There are some attractive fixed-rate deals around at the moment so check the Best Rate tables for the latest releases. You can currently get 3.4% on a one-year fixed bond from AA, FirstSave and Tesco Bank.

'As ever you should consider whether you can afford to tie up your money for a period of time. Most bonds don't allow withdrawals or if they do, you'll pay a penalty. Don't go for fixed bonds if you want to maintain access to your cash or want to benefit from rate rises.'

The Which? Best Rate tables highlight the top deals on 1-year, 2-year, 3-year, 4-year and 5-year fixed-rate savings bonds. Our fixed-rate cash Isa Best Rate tables cover the same periods.

pound coins

Which? Money when you need it

You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.

Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.

Or for money-saving tips, and news of how what's going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast

For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.