Best one-year fixed rate bond now pays 2%
The deal is from challenger Atom Bank but applicants can only open an account via mobile app.
The next best one-year deal is from Secure Trust Bank, paying 1.61%.
The highest paying two-year fixed rate bond, also from Atom Bank, now pays 2.10%, while the best buy five-year bond, again from Atom, pays 2.40%.
Data firm Moneyfacts says challenger banks have been “causing a storm” in the fixed rate bond market.
Charlotte Nelson, finance expert at the company, said: “Savers have been waiting patiently for some good news and at last there is some light at the end of the tunnel. This sudden boost to rates means that savers looking for a deal today will be significantly better off than even six months ago.
“In fact, this month so far has seen 53 rate rises to fixed rate bonds, which far outweigh the three rate rises Moneyfacts saw over the same period last year.”
She added: “This spike in competition all boils down to challenger banks trying to leapfrog their way past the competition to the top of the Best Buys. These lesser known brands have no widespread physical presence in the savings market, and the best way to become established and have savers take an interest is to offer the best rates in the market.”
|Highest Paying One-Year Fixed Rate Bond||2.10%||1.66%||1.40%||2.00%|
|Highest Paying Two-Year Fixed Rate Bond||2.75%||1.81%||1.60%||2.10%|
|Highest Paying Five-Year Fixed Rate Bond||3.35%||2.30%||2.05%||2.40%|
|Source: Moneyfacts.co.uk||Compiled: 27.2.17|