Britain's long-suffering savers have finally been handed some good news after the best fixed-rate savings bond climbed back to 5% for the first time since 2024. The return means someone with £20,000 to put aside could earn around £3,000 in interest over three years by locking into the top deal – roughly £760 more than they would receive from the average fixed bond. The milestone comes after years in which falling savings rates and stubborn inflation left many households feeling their cash was working harder for the banks than for them.
Deal details and requirements
The market-leading deal comes from Investec Save, which is offering a 5% AER fixed-rate bond over three years. Savers need at least £5,000 to open the account and cannot access their money until the bond matures, making it best suited to those who can afford to lock away their cash. Customers can invest up to £250,000, add more money for the first seven days after opening the account and manage it online. According to Moneyfacts, the return gives savers the chance to secure a guaranteed income at a time when many economists expect savings rates to drift lower over the coming years.
Comparison with average rates
Analysis by the comparison site shows the average new three-year fixed bond now pays 3.60%. On a £20,000 deposit, that would generate around £2,240 in interest over three years, compared with approximately £3,000 from the new 5% market leader. That leaves diligent savers almost £760 better off simply by switching to a more competitive account.
Expert advice
Caitlyn Eastell, personal finance analyst at Moneyfactscompare.co.uk, 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. For some, securing a competitive guaranteed return in the years ahead is crucial, particularly as household budgets are still under pressure."
She urged savers not to become complacent, saying that regularly reviewing savings accounts could make a significant difference. "Even if the gap may seem small, it can quickly translate into hundreds of pounds in extra interest," she said. "For someone with £20,000 to save, fixing at 5% for three years could mean securing around £3,000 in interest, compared with around £2,240 earned based on the current average new savings rate at 3.60%. 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."
However, Ms Eastell warned that fixed-rate bonds are only suitable for those who can afford to leave their money untouched for the full term. "Fixed bonds are designed for those who are comfortable locking their money away for the full term, so savers should ensure they won't need to access their cash before committing," she said. She added that some of the best easy-access savings accounts are also paying around 5%, making them a better option for emergency funds or anyone who may need access to their money.
