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Locking your money away in a 3 year fixed rate bond can be a good way to secure a profitable interest rate, but before committing to any 3 year savings account you need to do your homework. Here’s what your need to check.
If you are looking to put your savings away for a period of 3 years and willing to forfeit access in return for a good interest return, choosing one of the best 3 year fixed rate bonds on the market is one way to guarantee a set return on your money.
Here’s how to compare your options and find the best 3 year bonds, so you choosing the best home for your savings.
Is a 3 year fixed rate bond right for you?
Before considering 3 year savings bonds you need to seriously consider if you are happy to tie your money away for this length of time.
Although putting your money in a fixed rate bond is a good way to secure a higher interest rate, if you need to access the money during the account term any extra interest you will have gained is likely to be forfeited by withdrawal charges – if the account allows you to access your money at all.
If you’re concerned that you might need to use your savings within 3 years you may want to look at a 1 or 2 year bond instead, or alternatively choose an instant access savings or notice savings account so you can get to your money when you need to.
The advantage of opting for a fixed rate bond is that you can be confident that your savings will be earning interest at a rate you’re happy with throughout the duration of the term.
More profitable interest rates are likely to be available on 3 year fixed rate bonds than you could get on an account with a lesser, or without any fixed term period.
What’s more, if the returns banks are offering fall overall, you could end up earning more interest than you’d otherwise be able.
Conversely, however, although a fixed rate bond will guarantee a fixed return if interest rates start to climb you could end up missing out as you would not be able to move your money to a more profitable account without penalty.
As a result, making sure you find the best bond rates 3 year accounts is essential to ensure the home you’ve chosen for your savings stays as competitive as possible for the duration of the account’s term.
How to find the best 3 year bond
Choosing a 3 year bank savings account is an important decision and as a result, looking for the best 3 year bond rates is a must.
As the annual interest rate is fixed you need to look for an account that offers the highest 3 year fixed rate savings to maximise your return.
You should also consider how you want to manage the account; some of the best 3 year fixed rate bonds can only be managed online or by phone.
While this may not prove to be too much of an issue after your account has been opened you need to consider how you’ll want to access the cash once the 3 year bond ends.
You can compare the 3 year fixed rate bonds best rates and how they are managed by using our 3 year fixed rate bonds comparison table.
Once you’ve chosen one of the 3 year fixed rate bonds best rates accounts it’s also important to make a note of when the fixed rate period will end. This is so you can move your savings to a new home as the interest in your 3 year account is likely to drop drastically once the fixed term ends.
