Fixed-rate bonds can be safe haven

With savings rates so low and the stock market wobbly, the fixed-rate bonds offered by many banks and building societies are worth considering if you are seeking a safe haven for your money.

Nationwide and Northern Rock this week both launched new fixed-rate bonds. With Northern Rock, you can choose a term of one, two or three years, paying 4.4%, 5.1% and 5.3% gross per annum respectively.

Bonds can be opened with a minimum balance of £500 by post or through branches. Additional deposits can be made during the offer period, and interest can be paid annually or monthly - although if you opt for the latter the rates are lower: 4.1%, 4.8% and 5% gross. You are allowed to make withdrawals during the fixed period but there is a charge of 60/90/120 days' loss of interest on the amount taken out.

Nationwide is offering two-year and three-year bonds paying 4.75% and 5% gross per annum respectively. They are available via branches and the minimum investment is £1. No part withdrawals are permitted, but you can take out all of your money in year two or three - subject to the loss of up to 180 days' interest.