Compare fixed rate bonds from leading providers

You'll only find results from genuine companies. Our data experts check each company before we add them to our comparisons.

How to find the best fixed bond rates

Before you start comparing our best bond rates, ask yourself the following questions ...

1

How long can you leave your money untouched?

Some fixed rate bonds don't let you access your cash until the end of the term. Check carefully.

2

What's the interest rate? 

The best fixed rate bonds come with higher rates of interest. This means that if you find the best bond rates you'll get more for your money.

3

How much do you want to save? 

Some fixed rate bonds can be opened with as little as £1 whereas others can require up to £1,000.

4

How often do you want your interest to be paid out?

The best fixed rate bonds let you choose whether to have the interest paid yearly or monthly.

Fixed rate bond deals

36 results found, sorted by shortest term. How we order our comparisons. Commission earned affects the table's sort order.
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Fixed term

Most Transparent Savings Provider - Moneynet Personal Finance Awards (2021)
Investec 1 Year Fixed Rate Saver
Term
1 year
Account type
Fixed rate bond
Open with
£5,000
Interest rate
1.36% AER fixed
Protection scheme
FSCS
Withdrawal conditions apply.
Rate Tiers
Gross rateGross rateAER rateAER rate
Excluding bonusIncluding bonusExcluding bonusIncluding bonus
£5,0001.36%1.36%1.36%1.36%
Eligibility
Maximum Initial Deposit£250,000
Minimum Initial Deposit£5,000
Minimum Age18 years
Permanent UK Resident

What are fixed rate bonds?

Fixed rate bonds, or savings bonds, are a type of savings account, which tie up your money for a set length of time, known as the term. You're paid a fixed interest rate for the duration of the term.

Fixed rate bond rates, are usually higher than what you'd get with an easy access account. Typically, you can only deposit your money into them once, so you'll need to put it all in one go.

What types of fixed rate bonds are available?

There are two main types of fixed rate bonds:

Fixed rate savings bonds

These are standard fixed rate bonds that give you a fixed interest rate for the term of the bond.

Tracker rate bonds

These give you a fixed interest rate, at an agreed level above the Bank of England base rate.

When you compare fixed rate bonds, you'll be able to find the best bond rates for your financial goals.

With the best fixed rate bonds, what term lengths can I get?

Here are the typical term lengths offered, and the interest you may be able to earn.

Term length Interest rates (up to)Early withdraw penaltyMinimum investment
1 year0.50%No interest£1,000
2 year1.0%No interest£1,000
3 year1.25%No interest£1,000
5 year1.50%No interest£1,000
7 year1.75%No interest£1,000
Data correct as of May 2021

How is interest paid on fixed rate bonds?

Fixed interest

Although less common, some fixed rate bonds pay a fixed rate of interest on a monthly basis. This means that you'll earn the same amount of interest every month for the term of the bond. Often you can have the interest paid into a separate account and use it as income.

Compounded interest

Most fixed rate bonds, your interest is paid out every year. This means you can benefit from compounding interest over time. Compounding interest is where the interest gets added to the initial amount invested. So every year you'll earn interest on a larger sum of money.

What happens when the term of your fixed rate bond ends?

When your term ends, your bond has 'matured'. About a month before this happens, you'll be informed by your provider.

Usually you'll be given you a few options to think about. You can choose to:

  • Reinvest all the money

  • Reinvest all the money and add more

  • Reinvest some of the money, and withdraw some

  • Cash in your fixed term bond and close the account completely.

Think carefully about what you want to do with your earnings before you making a decision.

How to cash in matured fixed rate bonds

Here's what to do when it's time to cash in your matured fixed rate bond.

  • If you want to close a mature fixed rate bond account, you'll need to fill out a form given to you by your bank.

  • Wait for your bank to send you a cheque or transfer the money into your account

  • Decide what you'd like to do next. If you want to reinvest your money, you'll need to compare the best fixed rate bonds and all other savings accounts, or speak to a financial advisor.

Do you have to pay tax on interest earned?

Any interest you earn from a fixed rate bond that is in excess of your Personal Savings Allowance will be taxable.

The Personal Savings Allowance for basic rate taxpayers this is £1,000 and for higher rate taxpayers £500 for the 2021/2022 tax year.

However, those earning £17,570 or less in the 2021/22 tax year get an additional £5,000 tax-free interest, known as the 'starting rate'. Those earning more than £12,750 are also eligible for the starting rate, but the allowance decreases by £1 for every £1 of additional income over £17,570.

Pros and cons of investing in fixed rate bonds

Pros

  • Peace of mind
  • Guaranteed interest rate for the term of the bond
  • minimal risk

Cons

  • You lose access to your money for the term of your bond
  • You're stuck in an interest rate even if interest rates rise during the term of the bond
  • Requires you to pay in a lump sump

Are fixed rate bonds covered by FSCS?

Most savings providers are registered with the Financial Services Compensation Scheme (FSCS), which protects your deposits up to £85,000 per person per banking license.

But be careful how much you save with each provider. Often different banks operate under a single banking licence. This means that you'll only be covered up to £85,000 in total if you have accounts with different providers under the same license¹.

Are there any alternatives to savings bonds?

Yes, there are alternatives to bank bonds if you want to invest your money. You could look at peer to peer savings accounts which can give you a fixed rate of interest for an agreed term. The interest is usually higher than you'd get with even the best bond rates. But the downside is that your money isn't protected under the FSCS and it can be risky.

Other options when you're looking for the best fixed rate savings include fixed rate ISAs and high interest current accounts.

Fixed rate bond FAQs

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Why compare fixed rate bonds with money.co.uk?

Comparing fixed rate bonds could help you increase your returns. Our multiple award-winning comparison service makes sure you get our best interest rates. Our aim is to provide you with the most up-to-date information, as well as useful tools and calculators so to help you make life's most important decisions and take control of your money.

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Last updated: 20 August, 2021