The 1 Year E-bond 23 from the West Bromwich Building Society offers the best rate currently available on a 1 year fixed-rate savings account.
What's the deal?
The West Bromwich Building Society's 1 Year E-bond 23 offers a guaranteed return of 4.27% AER on savings balances from £5,000 to £1million (£2million for joint accounts) until 30th September, 2010.
Interest is paid annually (at the end of the account term); however, a monthly interest option is available for those who have £50,000 or more to invest.
What makes it great?
The 4.27% AER rate offered by the 1 Year E-bond 23 is the best return currently available on a 1 year fixed rate account.
The competitive interest rate helps this account to hold its own against some of the longer term fixed term offerings on the market. While the 12 month term provides a guarantee that you'll get a decent return on your savings in the short term whilst giving you the reassurance that your funds will be freed up for alternative investments late next year if interest rates should rise.
Who would it suit?
A minimum balance of £5,000 applies to this account so it's best suited to those who are looking to invest an amount greater than this. Similarly, as neither withdrawals nor closure are permitted during the fixed-rate term this account is only going to be a good option for individuals who are confident that they won't need to access their savings during that time.
Moreover, as the interest paid on this account is taxable (as is that paid on the vast majority of standard savings accounts), if you haven't yet taken advantage of your 2009/2010 ISA allowance it may be wise to do so first in order to maximise the return on your savings.
What's the catch?
While this account does offer the best 1 year fixed rate return currently available it's not going to be suitable for everyone.
The £5,000 minimum balance coupled with the 'no-access during term' policy means that it's only going to suit those who are certain that they can afford to tie their savings up until 30th September, 2010.
Furthermore, while the West Bromwich Building Society, along with other UK building societies, has hit the headlines in the past week after one credit scoring firm (Fitch Ratings) downgraded its credit score from A-rated it's important to put this into perspective.
The 'stability' of a financial institution is undoubtedly something to consider when deciding the suitability of an account; however, do bear in mind that the West Bromwich BS is a member of the Financial Services Compensation Scheme. As such any amount you have in savings up to £50,000 with them is protected should anything untoward occur. If you are concerned then the best course of action is to make sure that you split your savings between this account and another top paying account so that you hold no more than £50,000 in each.
What's the alternative?
The ICICI Bank's 1 Year Fixed Rate account follows a close second when it comes to 12 month fixed-rate returns, paying a guaranteed 4.00% AER for 12 months on balances from £1,000.
Alternatively, the AA's Internet 1 Year Fixed Rate Bond pays 3.75% AER on balances from £500 for 12 months.
In terms of slightly longer-term accounts Saga's 15 month Fixed Rate Bond pays 3.82% AER on balances from £1 - although it is only available to those over the age of 50. While Birmingham Midshire's Internet 18 Month Fixed Rate Bond offers a guaranteed return of 3.8% on balances from £1 and is available to all.
ICICI Bank, on the other hand, offers best of market returns of 4.35% AER on 2 year and 3 year fixed term accounts on balances from £1,000.
We have done our very best to make sure that the information included in this Deal is accurate. However, sometimes offers can be withdrawn or changed at the last minute so please do check that you're able to redeem this Deal before parting with any money, or going out of your way to take advantage of the offer.
