(To be clear I am talking about Australian Government Bonds)

Bond prices have fallen drastically the past few months and in turn yields have risen. Here is the yield curve taken from the ASX website: https://i.imgur.com/lpsRPFr.png

What is interesting to me are the 2-4 year bond yields which currently range an annualized return of 2.5-2.9%. Since we are borrowing from the australian government this is a risk-free return if you hold until maturity. Compare this to the best savings accounts which are right now 1.35%, with some strings attached.

Well of course bonds look better but thats only because interest rates are about to rise! This is true to some extent. It looks likely the cash rate will rise to 0.5% in June and we can (hopefully) expect savings rates to follow. So the savings rate is more like 1.65%.

But even then these bonds look like a better place to park your cash. You'd need four more rate rises to happen and then some more above that to make up for the time you were earning less than the bond. And that's assuming the banks pass on all the rate rises. So it may be a good idea to look into if your saving for a deposit, car, or just to lock in the return you'd receive for the next couple years. Unless I'm missing something here?

TLDR: If you need somewhere to park your cash for the next couple years bonds seem finally to be a competitive option.