Bonds battle lifts interest: Secure Trust now offering best buy of 1.25%

Bonds battle lifts interest: Secure Trust now offering 1.25% as new banks leapfrog each other to pay top rates on short-term fixed-rates

Bond boost: Several banks are now paying more than 1.2% fixed for one year

New banks have been leapfrogging each other to pay top rates on fixed-rate bonds.

There are now several which pay 1.2 per cent fixed for one year, compared with a very top rate of 1 per cent earlier in the summer. 

The best rate is currently 1.25 per cent on offer from Secure Trust Bank.

Today, OakNorth Bank is raising its one-year bond to 1.23 per cent while Aldermore Bank has reappeared among the top pays with a rate of 1.2 per cent. 

It joins Allica, Paragon and United Trust banks all of which pay 1.2 per cent, while Zopa increased its one-year rate to 1.21 per cent yesterday. 

Kent Reliance pays 1.17 per cent, making it the best deal in the high street for those who prefer to use a branch rather than open an account online.

These rates are far better than those offered by the big banks. HSBC and Barclays offer just 0.3 per cent on their one-year fixed-rate bonds.

You earn very little extra for tying your money up for longer with the top two-year rate at just 1.35 per cent from Secure Trust.