A bank is offering a “market-leading” 5% fixed rate bond in a first for the UK since 2024. Investec Save’s Fixed Rate Saver pays 5% gross/AER annually on a three-year bond.
You can invest a minimum of £5,000 up to a limit of £250,000. As it is a bond, your money is locked away for the duration of the product’s term. It is possible to add to the opening amount for up to seven days after the date the bond was opened. Investec’s Fixed Rate Saver can only be opened and managed online.
Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk, welcomed the new product. She said: “For the first time since 2024, the market-leading fixed bond now pays a 5% return, with savers now able to lock this return in for three years.
“In recent years savers have been left short-changed in real terms, but this marks a positive spin that gives them the chance to make their cash work harder.”
She said for some, securing a competitive guaranteed return in the years ahead is crucial, particularly as household budgets remain under pressure.
Ms Eastell explained for someone with £20,000 to save, fixing at 5% for three years could mean securing around £3,000 in interest.
This compares with an earning of around £2,240 based on the current average new savings rate of 3.60%.
She said: “Around £750 extra is not a small amount and teaches a valuable lesson that savers don’t need to have more money to get a better return, instead they may just need to move money they already have.”
The analyst cautioned that fixed bonds are designed for those who feel comfortable locking their money away for the full term.
She said: “Savers should ensure they won’t need to access their cash before committing.
“Some of the best easy access rates also offer around 5%, making them an ideal alternative for those needing money at short notice, such as for emergency funds.
“The most competitive deals can be short-lived, so those considering the switch would be wise to act sooner rather than later.”