Compare one year fixed rate bonds — featured accounts — Ordered by interest rate (AER)

Compare 18 month fixed rate bonds — featured accounts — Ordered by interest rate (AER)

Compare two year fixed rate bonds — featured accounts — Ordered by interest rate (AER)

Compare three year fixed rate bonds — featured accounts — Ordered by interest rate (AER)

Compare four year fixed rate bonds — featured accounts — Ordered by interest rate (AER)

Compare five year fixed rate bonds — featured accounts — Ordered by interest rate (AER)

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Fixed Rate Bonds Guide

What are fixed rate bonds?

Fixed rate bonds are usually savings accounts that pay a set rate of interest, agreed at the outset, for a certain term.

The interest rates available are generally higher than those on easy-access accounts especially if you opt for a fixed rate bond that lasts for two years or more.

You will, however, pay a penalty if you need to make a withdrawal within the fixed term.

Consequently, fixed rate bonds are only suitable for savers who are prepared to lock their cash away for a few years.

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What types of fixed rate bonds are available?

Most banks and building societies offer fixed rate bonds lasting for anything from six months to five years.

You will need to invest a lump sum to benefit, as you cannot generally add to your initial deposit as you might with an easy access account.

To qualify for some of the most competitive accounts, you may need a large amount. Some have minimum deposits of 10,000 or even 25,000.

However, with more than 100 on the market most of the time, you should be able to find good deals that require as little as 1,000.

What are the advantages of fixed rate bonds?

As mentioned above, fixed rate bonds usually pay higher interest rates than easy access savings accounts.

If you have some cash that you do not need access to for say two or three years, you can boost your returns by opting for a fixed rate account. This is particularly true should interest rates fall during the term.

But beware: you may find yourself locked into an uncompetitive rate should rates start to rise while your money is locked away in a fixed rate bond.

This is why shorter-term fixed rate bonds tend to be more popular, despite those lasting longer offering superior rates of return.

Either way, the simplicity of these products makes them a straightforward way to save particularly if you can afford to keep some rainy day savings in an easy access account.

If you lack discipline, fixed rate bonds are also a good way of ensuring that you leave your nest egg untouched for a certain length of time.

And as long as the bank or building society offering the fixed rate bond is authorised by the Financial Services Authority, the Financial Services Compensation Scheme will cover deposits of up to 85,000. Please ensure you check this as some banks and organsiations do not offer FSCS cover and therefore there is a risk to your deposit when opting to save your money with that organization.

Why should you use MoneySupermarket.com to compare fixed rate bonds?

As with all types of savings accounts, the rates available on fixed rate bonds vary widely. Whats more, the best ones often sell out or reach their target within a week or two.

MoneySupermarket.com allows you to compare the whole fixed rate bond market in a matter of seconds. It also offers information about how to open a fixed rate bond, most of which can be opened online, over the phone or in a branch. You can therefore find the best deal quickly and easily, whether you want an account that lasts for six months or five years.