The rates being offered on long term fixed rate savings bonds are on the increase, as providers compete for business with one another.

However, with potential interest rate rises on the horizon, even more attractive rates could be available soon.

Nevertheless, three, four and five year savings bonds have seen an increase in the rates being offered of up to 8% higher than those offered in January this year.

One provider, Vanquis Bank Savings offered a 2.2% rate on it's three year product in January, which has now risen to 2.25% this month, making it the most attractive rate for three year savings bond accounts.

Vanquis also offers a four year product which has increased from 2.25% in January to 2,42% now. The next highest rate on a four year fixed rate bond is 2.31%, offered by Ikano, which is a subsidiary of IKEA.

The five year bond market has also seen rises in the last couple of months, with the highest available rate of 2.42% in January eclipsed by more attractive offers this month.

The highest five year rate is now 2.51%, from Vanquis. The most attractive rates tend to be offered by smaller players that are keen to build up their base of deposits and are willing to pay more to do so.

The current bank rate of 0.5% could double within months according to Bank of England economists, with the end of the Funding for Lending and Term Funding schemes, giving further impetus to rates.

This obviously reduces the attractiveness of long term fixed rate policies, meaning that there will be further pressure on providers to increase the rates being offered in order to attract customers, leading to potentially better rates in the months ahead.

Contact Westminster Wealth Management today and one of our skilled advisers can construct a financial plan for you that will enable you to meet your financial goals.

 The value of investments and income from them may go down as well as up and you may not get back the original amount invested.