Savers received a boost today as new figures showed the average one year fixed rate bond has reached 2.85 per cent, its highest level of return since August 2011.
Choice has also increased in the market, with the number of one year bonds up from 80 six months ago to 101, according to data from Moneyfacts.co.uk.
Louise Holmes, the money website’s spokesperson, said that that fixed rate bonds appear to be a popular choice among consumers, indicating that savers are willing to lock their money away in return for a better rate of return.
“While fixed rate accounts offer some of the better rates in the savings market, the majority prohibit savers accessing their funds during the term,” she said.
“Investors must be prepared to tie up their money for the duration of the term to avoid falling foul of strict penalties such as loss of interest or even account closure.”
Many of the top bonds in the savings market are offered by lesser known names, highlighting the fact that if savers want to make the most of their money they may need to look further afield than their local high street, Ms Holmes added.