Pensioner bonds paying a market-topping rate of 2.8% for a one-year fixed term and 4% for three years are now on sale, although they are likely to “sell out” quickly.

If you’re aged 65 or over, you can deposit a maximum of £10,000 into each of the two bonds (so a maximum of £20,000 per person, or £40,000 per couple), which are similar to fixed rate savings accounts.

Officially known as 65+ Guaranteed Growth Bonds, only £10 billion has been allocated for savers. This is only enough for 500,000 customers if they maximise their savings.

Interestingly it may be better to opt for the 3 year bond even if you only intend to keep it for a year. Early withdrawals are allowed, though customers will lose 90 days interest. This means that a 3 year bond cancelled after a year will earn 3% interest, compared to the 2.8% available on the 1 year product.

The bonds can be applied for online, on the telephone and by post. We expect that they will only be available for a short amount of time.

More details and applications are available at http://www.nsandi.com/65-guaranteed-growth-bonds