Earn higher rates with fixed bonds

By DAILY MAIL REPORTER
Updated: 00:00 EST, 3 May 2007

Fixed rate bonds are now paying more than 4.8% after savings tax (6% before tax). Banks and building societies are offering new bonds with higher rates ahead of next week's anticipated Bank of England base rate rise from 5.25%.

Leed's BS's two-year bond, out this week, pays 4.96% (6.20%) fixed for two years on a minimum investment of £5,000.

Other top two-year deals come from Derbyshire at 4.97% (6.15%) and Anglo Irish at 4.9% (6.12%) on £500 or more and Heritable Bank at 4.93% (6.16%), minimum £1,000. Halifax pays 4.9% (6.12%) on its two-year fixed rate bond for those willing to buy over the internet.

Best deals on one-year bonds are from Birmingham Midshires at 4.98% (6.23%) on a £1 minimum, Nottingham Building Society at 4.96% (6.2%) on £1,000 plus and Anglo Irish at 4.92% (6.15%).

Top monthly income rates are at Saga, available to the over-50s, at 4.87% (6.09%) fixed for one year or 4.82% (6.03%) for two years on £1 or more. Birmingham Midshires pays a monthly income of 4.79% (5.99%) on its oneyear bond.

If you haven't used your cash Isa allowance for this tax year - which started last month - you can earn a fixed 6.15% tax-free with Bradford & Bingley on £3,000.

Northern Rock pays 6.01% fixed for one year, minimum £500; and Derbyshire 6% fixed for two years on £1,000 or more. Both will let you transfer cash Isas you've built up in previous years into the account to earn these top tax-free rates.