Secure Trust Bank has launched a new seven-year bond, as the battle to allure savers into long-term fixes warms up.
The new fixed-rate bond offers an inflation-busting 3.52% per year (2.82% net) on investments of at least £1,000.
Interest is paid annually on December 31 into a nominated bank account.
The bond nudges just ahead of the Skipton Building Society’s seven-year fix (3.50%), and will appeal to who are happy to commit their cash until the end of the decade.
But savers will have to be certain that access to funds will not be required during the term as no withdrawals or additions are allowed.
Despite warnings by experts that savers should avoid fixing beyond a few years, the appeal of long-term bonds has increased as rates have continued to fall on easy-access accounts.
Current Accounts
But a feasible alternative is available now in the form of current accounts, some of which are comprehensively outperforming savings accounts.
The Nationwide FlexDirect account offers a stunning 5% on credit balances up to £2,500 for the first year. The mutual’s first paid-for account, the FlexPlus account, offers 3% interest as part of its benefits package.
The Santander 123 Current Account offers an unusual combination of cashback and interest. Savers can earn interest 1% on balances above £1,000, 2% on balances above £2,000, and 3% on balances between £3,000 and £20,000. (See our full review here.)
Banks including Halifax and First Direct are also offering incentives of £100 to customers who switch their current accounts.
Though a one-off payment, it would take a balance of around £5,400 in the best performing easy-access ISA (1.80%) to offer that kind of return over the year.
Competition between providers has improved since the launch of the current account switch service, and bank accounts have become more multifaceted, acting as reward schemes and savings accounts. They may now prove to be an ideal option for those wanting better returns on their savings without fixing for a lengthy period.
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