The top fixed rate bonds now offer 5%

Fixed rate bonds last offered this rate in November; it’s the highest rate for a one year bond in over 13 years.   

Turkish bank Isbank increased the rate on its one, two, three, four, five, and seven year fixed rate bonds to 5% gross today. This rate can only be accessed through Raisin – a savings platform – and it is the first time since November that a fixed rate bond has been available at this rate of interest.  

Rachel Springall, Finance Expert at Moneyfactscompare, explained that the latest raft of savings rates hikes was due to the Bank of England’s successive base rate increases and increased competition from providers in the market.

“Compared to a year ago, savers can get a return of almost 3% more on the top one-year fixed bond,” she said.

As of 1 November, Gatehouse Bank offered the best rate of 5.10% gross on its five year fixed Woodland Saver. This bond was withdrawn from the market on 11 November.

Meanwhile, the last time a one year fixed rate bond offered 5% AER was in November 2009. This was from Indian provider ICICI Bank, who also offered a rate of 5.10%.

Isbank’s bonds pay the 5% AER yearly on deposits of £1,000 or more.

However, you’ll need to consider your initial deposit carefully as further addition aren’t allowed and there is no way to access your funds until maturity.

While applications for any of these accounts need to take place online, there are a range of ways to manage your funds. You can manage your accounts online, via the post, or telephone.

It is uncertain whether other providers will follow suit and offer their fixed rate bonds at 5.00% gross.

So make sure to regularly visit our website for the latest trends in the savings market.