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One-year bond rates climb past the 2% mark

Written by: Paloma Kubiak
Atom Bank has climbed to the top of the best buy tables for its one-year bond offering, and overall, rates on these products are up by nearly 50% since October 2016.

The digital bank has launched a one-year bond paying 2.05% gross/AER (minimum £50), the highest rate seen for almost two and a half years.

It pips the offering by Sharia-compliant Gatehouse Bank which last month raised the rate on its one-year fixed-term deposit account to 2%.

Analysis by independent savings advice site, Savings Champion, reveals that best buy one-year bonds are up 46% since the low point in October 2016, after the base rate cut earlier in August.

Anna Bowes, director at Savings Champion, said: “Although this bond won’t be for everyone, as you have to apply via a mobile app, it is really encouraging to see Atom Bank pushing one-year fixed rate bonds back above 2%.

“We hope that other providers will respond to this challenge – pushing rates up further still.”

Atom Bank also sits at the top of the best buy table for its two-year bond offering – 2.15%, but when it comes to the three year tables, Gatehouse Bank pays an expected profit rate of 2.33% on a minimum of £1,000.

Related: See’s ‘Should I entrust foreign banks with my savings?’  and Market-leading Sharia savings accounts: should you consider them? for more information.

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