Spotlight: Co-operative Bank's 3-year Fixed Rate Bond

Fixed rate bonds continue to offer the most attractive rates for savers looking for good returns. The debate goes on, however, as to how long it will be before base rate starts to creep up, so many savers are confused about how long they should be locking their money away for.

The highest rates are available to those who want to save over a long period, but this week has seen the shorter-term bonds market heat up with a new launch from both The Co-operative Bank and Britannia.

Their new bond pays a five-year fixed rate of 5 per cent. Unlike the majority of fixed rate bonds, this one allows closure within a 30-day window before anniversary at the end of each year.

Of course, you will be hit with a 2 per cent penalty if you choose to close the bond ahead of it maturing.

However, it will be a popular choice among those worried about fixing for a longer period in a low base rate environment – if base rate does rise within the next few years then savings rates will no doubt follow.

Kate Murphy, moneysupermarket.com