London Scottish Bank one-year bond paying 7%

Commenting on London Scottish Bank’s new bond at 7.0 per cent, Kevin Mountford, head of savings at price comparison site moneysupermarket.com, said: “It’s all change in the fixed rate bonds market, with bonds being back in vogue after a slight slump in recent weeks. London Scottish Bank now has a table-topping 7.0 per cent offering, with Derbyshire Building Society offering 6.9 per cent on their one-year bonds, and ICICI paying 6.85 per cent so there are some really good deals around.

"Savers will need to move fast to take advantage of the London Scottish deal as it is unlikely to be around for long. When Stroud & Swindon opened its 7.05 per cent bond in September, it took just days to fill the tranche so many savers missed out. All the signs are pointing to the next rate move being down, so now could be an ideal time to lock in.

“What is interesting about this launch is that it is bucking the trend of the underlying money markets, where swap rates are falling. Providers have traditionally relied on money coming in via easy access accounts to fund their lending activities but the problem there is that money can walk out of the door as quickly as it came in.

"Locking people in for a fixed time allows providers to even out their books somewhat, but no matter what the rationale behind it, keen savers should strike now at 7.0 per cent.”