Bond rates down 1.2 pc on last year

MELTON MOWBRAY BS has launched a new fixed-rate bond paying 1.31 pc for three years.

It is one of the top deals available for this period. Others include Principality BS at 1.44 pc and Aldermore Bank at 1.39 pc.

Monthly income seekers have suffered as they look to make their savings boost their pension. And three years is a long time to tie up your money for very little extra income, when rates are at a historic low.

A year ago, you could earn 2.5 pc with the best deal. Now, the top one-year rates include 1.37pc from internetbased Charter Savings Bank, giving just £11.42 a month on £10,000.

In the High Street you earn even less, with 1.09 pc from Principality BS, 1pc from Skipton BS or just 0.9pc from Nationwide. Charter Savings Bank pays 1.39 pc for 18 months.

The top two-year deals include Kent Reliance at 1.34pc, but more widely available in the High Street is the 1.09pc rate from Skipton BS or 1pc from Nationwide.

Cash Isa rates are also low. The best rate for monthly income for one year is 1.09 pc from Kent Reliance, Shawbrook and Aldermore banks, giving you just £9.08 a month from your £10,000. In the High Street, Skipton BS and Nationwide pay 1pc and 0.9 pc respectively.

If you tie up your money for two years, you will see just 83p a month more on your £10,000 — even with the best deal. These include Principality BS, Aldermore and Shawbrook banks at 1.19pc, giving £9.91 a month.