This depends on several factors, including:

  • How long can you leave your money untouched: some bonds do not let you access your cash once they are opened.

  • The interest rate: you will get a better return on your money if you choose a higher rate of interest.

  • How much you want to save: some bonds can be opened with as little as 1.

You can usually choose between how often you have your interest paid out, annual or monthly. Find out is more information on fixed rate bonds here.

How do fixed rate bonds work?

They offer you a fixed interest rate for a set term, and there are two main types:

  1. 1.

    Fixed term with no access to your money: for example, a 2% fixed bond for 1 year that does not let you access to your money until the bond matures

  2. 2.

    Fixed term with access to your money with a penalty: for example, a 2% fixed bond for 1 year that gives you access to your money with a 90 day interest penalty

Are there any alternatives?

You could also get a fixed return for a set term by saving into a peer to peer savings account.

They usually earn you more than fixed rate bonds, but your money will not be protected under the Financial Services Compensation Scheme.

How long can you save for?

You can find a fixed rate bond with the following terms:

  • Weeks: 1, 2 and 3

  • Months: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 18

  • Years: 1, 2, 3, 4, 5 and 7

Some fixed rate bonds have a predetermined maturity date; for example, a maturity date of 30th April in four years' time rather than four years after the date you open the account.

If you want to tie your money up for 5 years or more talk to an IFA first. They will discuss all investment options with you, even if you want to earn an income from your money.

You can compare fixed rate bonds using our table, and use the filters to find a term that suits your saving needs.

Fixed rate bond FAQs

Q

Do I pay tax on a fixed rate bond?

A

If you are a basic rate taxpayer you can earn up to 1,000 of savings interest tax free, or 500 if you are a higher rate taxpayer. Find out more here.

Q

How much money do I need to open a fixed rate bond?

A

This can vary from 1 up to 50,000. You can use our table filters to find a savings account based on how much you have to open it with.

Q

How safe is my money in a fixed rate bond?

A

Most banks are backed by the Financial Services Compensation Scheme (FSCS) which protects your money up to 75,000 in a single institution.

Q

Can I have more than one fixed rate bond?

A

Yes, but make sure you keep some money accessible in case of an emergency. Read this guide for help choosing the right savings account.

Q

Can I have a fixed rate bond if I have bad credit?

A

Yes, your finances are not checked when you open a savings account. If you need help choosing the right savings account, read this guide.