Spotlight: Leeds' fixed-rate postal bond

Finding a decent return on your savings is particularly hard just now, given the low base rate environment.

Many people are turning to fixed-rate bonds to secure higher interest – but they sacrifice any flexibility for this higher rate.

The new Fixed Rate Postal Bond from Leeds Building Society pays a respectable but not groundbreaking 2.77 per cent AER – 2.27 percentage points above the base rate. That's fixed until 31 May next year and there's a minimum deposit of £1,000.

With alternatives like the Hampshire Trust paying 3.53 per cent on a six-month bond, there are better options in terms of interest. However, the more competitive accounts don't allow withdrawals during the fixed term, or they dock interest if you do move money out of the account. This bond from Leeds allows savers to access their money without any penalty.

If you want a good short-term fixed rate without losing access to your cash in the meantime, then this is a competitive account.