Brilliant bonds for all savers

No matter how long you want to stash your cash away, we round-up the best savings bonds.

Do you have a chunk of money you're keen to earn decent interest on? If so, a fixed-rate savings bond might be the right choice for you.

You could currently bag a rate of well over 5% - if you're prepared to lock your cash away for five years. This is much better than the current variable rates on offer from the top easy access savings accounts. Of course, if variable rates rise dramatically in the next couple of years and overtake your bond rate, this may turn out to be the wrong decision.

I'm going to highlight my top fixed bond picks for both the long and short term. That way, you'll hopefully be in a better position to weigh up all the risks involved and come to an informed decision about the length of bond that's right for you.

Best one year bond

In the one year category, it's tricky to pick a clear winner. I'd recommend NS&I's Guaranteed Growth Bond. This bond pays a market-leading 3.95% AER. You can invest between £500 and £1m. And your savings are 100% safe, guaranteed by the UK Government.

Best two year bond

If you're willing to stow your cash away for two years instead of one, you'll find the rate you receive jumps quite substantially.

In this category I think there's a clear winner: My top two year bond pick is the Internet 2 Year Fixed Rate Bond, from the AA. It pays a juicy 4.35% AER, with a £500 deposit needed to get it started.

Best three year bond

If you're willing to take a slightly higher risk for a higher fixed rate of interest, a three year bond may appeal.

My gold medal winner in this category is the 3 Year Online Bond from Barnsley Building Society. This bond pays a substantial 4.7% AER, and can be opened with as little as £100.

Just be aware that this account has been marketed rather cheekily. Although it's called a three year bond, the full term is actually a few months longer than that with the rate fixed until 28th February 2013.

Best four year bond

Next, my top pick bond for people willing to take a chance over four years.

Here, Principality Building Society just pips the competition to the post with its Direct Fixed Rate Bond 154. This pays a very healthy 5.1% on balances over £1,000.

If your cash stash adds up to less than £1,000, the 4 Year Online Bond from Barnsley Building Society is also worth a look. It pays a round 5% AER - and you need just £100 to get one started.

Best five year bond

And finally - my top pick for people willing to play interest rate roulette for five whole years!

The clear winner here is the 5 Year Fixed Rate Bond from Skipton Building Society. It pays 5.35% AER. You need £500 to open the account, and it's fixed until the 30th November 2014.

So how long should you commit?

If I had a lump of cash to stow away today, I'd opt for a two year bond. I think the 4.35% rate has a very reasonable chance of keeping ahead of variable account rates for the next 24 months.

Over the next five years, however, the picture looks very different. If the base rate rises significantly during that period - as many economists expect - variable interest rates are likely to steam up in response.

That's why in the current climate I wouldn't lock into a four or five year bond; there's just too great a chance of me and my fixed rate being left far behind.

Of course, I could be wrong!

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