Moneyfacts advises consumers to opt for short-term fixed rate bonds

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Moneyfacts advises consumers to opt for short-term fixed rate bonds

Mon 13th Sep 2010

Savers have been told by Moneyfacts that it would be more sensible to sign up for shorter-term fixed rate bonds in the current climate.

A spokesperson for the firm noted that interest rates are low at the moment and are likely to go up considerably over the next few years.

As a result, even the rates of the best long-term fixed rate bonds will look bad in comparison to the deals that are likely to be available in the future.

She explained: "At the end of the term - in five years time - they could be less competitive in the long term, so it might be best to take out a short-term fixed-rate bond on the savings front."

Her remarks were made after the Bank of England's Monetary Policy Committee announced that the base rate will stay at 0.5 per cent for another month, with the organisation's quantitative easing also being held at its current level of £200 billion.

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