Spotlight On: Yorkshire building society fixed rate savings bond

The deal

Yorkshire Building Society has launched a three-year fixed rate savings bond paying 4 per cent.

The good points

It matches the best buy rate over three years offered by accounts from Northern Rock and the Post Office. With inflation currently at 3.2 per cent, that doesn't seem too bad. The account can be opened in branches, online or over the phone.

The bad points

You won't be able to get at your cash during the three-year term. Also, the minimum need to open an account is £1,000 compared to just £1 at Northern Rock and £500 at the Post Office.

Conclusion

Putting savings into a fixed rate deal is a gamble. If interest rates rise you could end up regretting locking your cash away, especially as there are no withdrawals allowed on the account. You can get 3.15 per cent with one year fixed rate bonds with Northern Rock and Norwich & Peterborough, which could be another option if you may need your cash sooner.