Competitive fixed rate bonds exceeding 7%

Commenting on the competitive fixed rate bonds available, Kevin Mountford, head of savings at price comparison site moneysupermarket.com, said: "We have seen some fantastic fixed rate bonds pop up recently, with competitive rates exceeding 7.0 per cent AER.

"Following FirstSave's table-topping fixed rate bond launch at 7.1 per cent and Kaupthing Edge increasing the rate on its one year bond to 7.01 per cent, it seems British banks are keeping up with competition; West Bromwich building Society is offering a rate of 7.05 per cent AER, and as of Saturday, savers can lock into Yorkshire Building Society for two years at a rate of 7.0 AER.

"While savers can now take advantage of several accounts offering over seven per cent, if you can hold on for a little while longer it might prove financial worthwhile. We can expect even better rates to trickle through if as expected the Bank of England raises interest rates again."