Fixed rate bond market heats up as savers earn higher returns

Fixed rate bond market heats up as savers earn higher returns

With July the month that bond maturities are expected to peak - fast approaching, some fixed rate bond providers have upped their game in the competition through increased rates, offering higher returns for savers.

Barclays today launched a new 2 year fixed rate bonds product offering up to 3.70%, one of the highest paying products of its kind on the current savings market.

The move from Barclays comes at a time when several fixed rate offers have been withdrawn or had rates reduced, so the new bond is likely to see Barclays heating up the competition and setting a new trend.

Andy Gray, Barclays Head of Mortgages and Savings said: "Our two year fixed rate is one of the best short term rates available to savers, particularly at a time when some competitors have been cutting their rates. This bond gives savers a safe haven for their money, offering them the opportunity to secure a great high fixed interest rate from just 500.

"The rate increase will have a major impact on our customers' savings particularly those customers who are looking to earn a regular income from their savings."

The current top paying Barclays fixed rate bond offers 3.70% gross p.a/AER on balances of 50,000 and above and 3.30% on balances below 50,000, while the minimum investment stands at just 500. This will offer a safe haven for customers, hoping to take advantage of the ongoing record low base rate, which is likely to remain unchanged for some time.

ICICI UK are offering a similar selection of fixed rate bonds and have also increased the rate on the ICICI two year fixed rate bond to 3.70% gross p.a/AER on balances of 1,000 or more.

Savers looking to invest for a shorter period of time may wish to consider the ICICI fixed rate bond that carries a term of just one year and pays an impressive 3.0% gross p.a/AER on balances of 1,000 or more.

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