If you are happy to lock your savings away for 5 years and want a guaranteed return on your money then 5 year bonds could provide the answer.
In exchange for holding your savings for a full 5 years, banks and building societies will generally offer a significantly better interest rate on their 5 year term savings accounts than on other accounts with lesser terms, or those that give you instant access to your savings.
But before locking your money away for half a decade there are several things you need to check.
Is 5 years the right length of time?
Choosing a savings account that commits your cash for 5 years represents a big decision, especially as many 5 year fixed rate bonds will not allow you to access your money during the account term, or will penalise you for changing your mind and drawing on your money before the account end date.
So before depositing your savings in a 5 year fixed rate bond you need to ask yourself whether there is any chance you might need to use your savings before the end of the 5 year period, or whether you can do without the money until the end of the account term.
This is important to consider as even the best 5 year bonds are likely to impose charges that will make them less competitive than more readily accessible accounts should you withdraw any or all of your money early.
Is fixing an interest rate for 5 years a good idea?
Although 5 year fixed rate bonds savings accounts offer a significantly higher interest rate than you'd otherwise be able to benefit from, tying your money up for such a long period may not necessarily be a good thing.
If interest rates rise elsewhere after you've opened your account, you may find that even the best fixed rate bonds 5 years from now are less profitable than when you opened them.
That said, the opposite is also true - if interest rates fall then you'll be earning more interest on your savings than would otherwise be possible.
Of course, one of the added bonuses of saving in a 5 year fixed term account is that you have the reassurance of a guaranteed return during that period so you don't need to be concerned by the task of monitoring your returns and switching your savings to a different home on a semi-regular basis.
That said, many people argue that saving in cash for such a long period may not offer the best returns possible on your money.
If you don't want to touch your savings, it's possible that investing in stocks or shares over 5 years could provide a significantly more profitable route, although returns are never guaranteed in the same way as with 5 year fixed rate bonds savings accounts and you would need to be comfortable that there would be some risk to your money.
To find out more take a look at our guide How to Start Investing in Shares.
How to get the best 5 year fixed rate bonds
With your savings locked away for a substantial length of time making sure you find the best 5 year bond possible is vital.
Your main concern should be to find the 5 year bonds best rates currently on offer; this is because it is the interest rate which will determine exactly how much your fixed rate bonds pays over the term.
To compare the best 5 year fixed rate bonds you can visit our 5 year bond comparison table.
Once your money is invested then there will be little for you to do but wait until the term ends. Put a note in your diary to remind you when the 5 year period is due to finish and move your savings to a new account that offers a good return after this time.