Spotlight On: Nottingham's 3.75% two-year bond

Simon Read
Saturday 28 August 2010 00:00 BST
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The deal

Nottingham building society is paying 3.75 per cent fixed until 3 September 2012 on £1,000 or more.

The good points

The rate is slightly more generous than two-year deals from the likes of the Coventry and the Cheshire. Building societies seem to be returning to offering decent savings rates.

The bad points

It's a postal-only account, which means it takes time to set up and it will take time to withdraw cash when the account is closed. Fixing for two years when it's quite likely that interest rates could rise during the next 24 months is a little bit of a risk, especially as the Nottingham won't allow any early withdrawals from the account.

Conclusion

Longer-term fixed rates are improving as the likelihood of a rates increase improves. Lock your cash away for three years, for instance, and you can find accounts offering more than 4 per cent. But now could be the time to keep cash in more flexible accounts while there's uncertainty about rates.

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