Spotlight On: Yorkshire building Society one-year bond

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The Independent Online

The deal

Yorkshire's one-year bond offers 3.45 per cent on savings of £1,000 to £2m. Available online only, the rate is fixed until 31 August 2012.

The good points

The interest rate puts this deal into the joint top spot for one year bonds available online, but demands just 10 per cent of the minimum £10,000 initial deposit for the same rate from Vanquis Bank.

The bad points

There are no permitted withdrawals, and don't forget to factor in the tax deductions.

Conclusion

For a basic rate taxpayer, the net rate of interest is just 2.76 per cent, compared with, say, Northern Rock's Fixed Rate e-ISA at 3.20 per cent with only a £500 minimum saving. In fact, you can even get better rates and far more flexibility with several instant access cash ISAs. However, if you've maxed out this year's ISA allowance, are confident that interest rates won't move significantly until next summer and can commit the cash for a year, it's definitely a contender.

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