One-year bonds now pay 1.95 pc

RATES on fixed-rate bonds are rising as new banks compete for your money.

It’s good news for savers looking to roll over their oneyear bonds while they wait for rates to rise, as they can earn more over the next year.

Money has poured out of fixed-rate bonds in the past two years in favour of easyaccess accounts, but figures from the Bank of England suggest the tide is turning.

The top one-year bond is 1.95 pc from Atom Bank, an account you run through an app on your smartphone or tablet. A year ago, it offered a much lower 1.5 pc.

Charter Savings Bank now pays 1.72 pc fixed for a year against a top 1.6 pc a year ago. And last week, OakNorth bank raised its rate to 1.82 pc and Paragon Bank to 1.85 pc.

If you stick to the High Street, you earn less. The best rates include 1.25 pc from Virgin Money, 1.3 pc at Leeds BS or 1.2 pc from Yorkshire BS.

But your local building society could offer more — Hinckley & Rugby pays 1.4 pc, Principality 1.37 pc and Dudley 1.31 pc.

Big banks, however, offer much lower rates. Lloyds pays 0.4 pc, about a fifth of Atom’s deal, while Halifax offers 0.45 pc, HSBC 0.5 pc, NatWest and Barclays 0.7 pc and Santander 0.5 pc — or 0.7 pc to its 123 customers.