This comparison simply includes all savings accounts.
Best Fixed Rate Bonds
Why we like it: 6 month term. Interest can be paid monthly or annually. Minimum deposit £500, Maximum deposit £250,000. No withdrawals permitted. FSCS Protected
Why we like it: Minimum deposit £500. Open an account singly or jointly. Interest can be paid monthly or annually. Eligible deposits covered by UK FSCS.
Why we like it: Interest can be paid monthly, quarterly or at maturity - Minimum deposit £1,000 - Maximum deposit £200,000 - No withdrawals permitted - FSCS Protected
Why we like it: 3 year term. Interest can be paid monthly or annually. Minimum deposit £500, Maximum deposit £250,000. No withdrawals permitted. FSCS Protected
Why we like it: 4 year term. Interest can be paid monthly or annually. Minimum deposit £500, Maximum deposit £250,000. No withdrawals permitted. FSCS Protected
Why we like it: 5 year term. Interest can be paid monthly or annually. Minimum deposit £500, Maximum deposit £250,000. No withdrawals permitted. FSCS Protected
Is a fixed rate bond best for you?
Whether putting your money into a fixed rate bond makes sense usually depends on how much money you have to deposit. For smaller sums, a savings account will generally offer the best rates of interest.
However, if your savings take you above the limit on which your savings account will pay interest or your maximum permitted balance, a fixed rate bond can be a very good option. It will allow you to earn a return on your money at a guaranteed rate for the life of the bond. Fixed rate bonds usually have a much higher maximum deposit than the threshold at which most current accounts stop paying interest.
One key advantage of fixed rate bonds is that they can be set up in parallel with your existing current account, either with the same institution or a different one. This means you can start getting more out of your savings without needing to rearrange your day-to-day banking.
It is worth bearing in mind that if you have savings in your current account not earning interest, then that money is likely to be effectively declining in value in real terms thanks to inflation. Placing your savings into a fixed rate bond is therefore a great way to maintain your money’s value over time.
How long should you fix your savings for?
Most fixed rate bonds are offered for 1 year, 2 years, 3 years or 5 years. Some companies also offer 30 month and 4 year bonds, although these are less common. In general, the longer the term of the bond, the higher interest rate you will receive.
Many bonds will allow you to remove funds early if necessary, but you will usually incur some kind of penalty for doing so. This most often involves forfeiting some of the interest you would otherwise have earned. This means if you are going for a longer term bond, you need to be very confident you will not want to access those savings before the bond reaches maturity.
Compare the best fixed rate bonds
The following are some of our top choices for the best fixed rate bonds currently on the market. Please be aware that interest rates do change over time, so refer to the table above for the latest rates.
Aldermore offer a very quick, slick online process to set up an account with them, which takes just minutes, including all ID checks. They require a minimum deposit of £1,000 and you can access your account online, by phone or through the post.
Good to know
- Aldermore Bank won Best Online Savings Account Provider at the Your Money Awards 2014.
Market leaders United Bank Ltd (UBL) require a minimum deposit of £2,000. Account access is online only and interest payments can be taken monthly, annually or at maturity.
Good to know
- You need an existing UK bank or building society account to apply.
Another market leader, Vanquis Bank offer highly attractive interest rates on deposits from £1,000 to £250,000 and you can take your interest monthly, yearly or at maturity. Access to accounts is online only. Vanquis Bank also offer 4 year fixed rate bonds with the same terms, but at a slightly lower rate of interest.
Find the best fixed rate bond deals
Placing your savings into a fixed rate bond can be a big commitment, as it means you won’t have easy access to your money if you later need it. With so many different products on the market, it can also be difficult to know which is the best choice for you.
Before making a decision, be sure you know exactly what you want to get out of your bond and be prepared to shop around to find the best deals. Our fixed rate bond comparison tool above is a great way to keep on top of the current most competitive deals.