Which financial product will offer you the best return usually depends on how much money you have to invest. You will usually get a better interest rate from a savings account for smaller amounts of money. For example, RCI Bank and Post Office presently offer 1.30% on their savings accounts. Typically, with a savings account, there is generally quite a low cut off point above which no interest will be paid or there is a limit on the maximum deposit you can make.

With a fixed rate bond, you will get a guaranteed rate of interest for the term of the bond. The maximum deposit for a fixed rate bond is usually much higher than that on which a savings account will pay interest and the longer the bond is for, the better interest rate you will normally be offered.

Common types of bonds tend to last for 1 year, 2 years, 3 years or 5 years. You may be allowed to withdraw money or close your account early, but this will generally result in a penalty calculated as a percentage of the interest you would normally earn.

Fixed rate bonds can be set up alongside your current account, allowing you to start earning interest on all of your savings without disrupting your day-to-day banking. This makes them a highly convenient way to start getting a better return on your money.

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