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This comparison simply includes all savings accounts.

Aldermore
Fixed Rate Bond Aldermore
Min deposit £1000
Term 1 Year
Interest AER 1.35%

Why we like it: 1 year term, minimum deposit £1,000, no withdrawals permitted. FSCS Protected

Investec Savings
Fixed Rate Bond Investec Savings
Min deposit £5000
Term 1 Year
Interest AER 1.33%

Why we like it: Interest paid on maturity. Automatic repayment to your linked account. Maximum deposit £250,000. FSCS Protected. Must be UK resident, have a UK address and be aged 18 or older. No withdrawals permitted. Can’t have held an Investec Online Flexi Saver or Fixed Rate Saver in the last 12 months

QIB UK Bank
Fixed Rate Bond QIB UK Bank
Min deposit £1000
Term 2 Years
Interest AER 1.70%

Why we like it: Market leading 2 year fixed rate bond. Register for a free Raisin UK Account to apply for product and receive a cash bonus. Interest paid on maturity. Maximum deposit £85,000. FSCS Protected. Must be UK resident and aged 18 or older. No withdrawals permitted

IS Bank
Fixed Rate Bond IS Bank
Min deposit £1000
Term 2 Years
Interest AER 1.70%

Why we like it: Register for a free Raisin UK Account to apply for product and receive a cash bonus. Interest paid on maturity. Maximum deposit £85,000. FSCS Protected. Must be UK resident and aged 18 or older. No withdrawals permitted

QIB UK Bank
Fixed Rate Bond QIB UK Bank
Min deposit £1000
Term 3 Years
Interest AER 1.77%

Why we like it: Market leading 3 year fixed rate bond. Register for a free Raisin UK Account to apply for product and receive a cash bonus. Interest paid on maturity. Maximum deposit £85,000. FSCS Protected. Must be UK resident and aged 18 or older. No withdrawals permitted

IS Bank
Fixed Rate Bond IS Bank
Min deposit £1000
Term 3 Years
Interest AER 1.75%

Why we like it: Register for a free Raisin UK Account to apply for product and receive a cash bonus. Interest paid on maturity. Maximum deposit £85,000. FSCS Protected. Must be UK resident and aged 18 or older. No withdrawals permitted

Aldermore
Fixed Rate Bond Aldermore
Min deposit £1000
Term 4 Years
Interest AER 1.45%

Why we like it: Minimum deposit £1,000 - No withdrawals permitted - FSCS Protected

RCI Bank
Fixed Rate Bond RCI Bank
Min deposit £1000
Term 4 Years
Interest AER 1.10%

Why we like it: Which? Recommended Savings Provider. Save from £1,000 to £250,000. No withdrawals before the end of the term. Your eligible deposits with RCI Bank UK Limited are protected up to a total of £85,000 by the Financial Services Compensation Scheme (FSCS)

IS Bank
Fixed Rate Bond IS Bank
Min deposit £1000
Term 5 Years
Interest AER 1.80%

Why we like it: Register for a free Raisin UK Account to apply for product and receive a cash bonus. Interest paid on maturity. Maximum deposit £85,000. FSCS Protected. Must be UK resident and aged 18 or older. No withdrawals permitted

Cambridge & Counties Bank
Fixed Rate Bond Cambridge & Counties Bank
Min deposit £10000
Term 5 Years
Interest AER 1.59%

Why we like it: Register for a free Raisin UK Account to apply for product and receive a cash bonus. Interest paid on maturity. Maximum deposit £85,000. FSCS Protected. Must be UK resident and aged 18 or older. No withdrawals permitted

What is an income bond?

An income bond is a type of savings account that allows you to earn a regular income in the form of interest on your savings. Income bonds are popular with those who have a lump sum in savings and want to use this to generate income, such as many pensioners.

Types of income bonds

There are various types of bonds that will allow you to turn your savings into a source of regular income.

Fixed rate bonds

One of the most popular types of bonds for those looking to earn a return on their savings. Fixed rate bonds offer a guaranteed rate of interest in exchange for agreeing not to touch your money for a fixed period – usually 1, 2, 3 or 5 years.

Interest can be taken monthly, giving you a regular income and the fixed rate means that you know exactly what your income will be for the life of the bond. However, because the rate is fixed the amount you earn will not increase in line with inflation.

It’s also worth bearing in mind that if you need to withdraw your money early, you may be hit with a penalty fee. This is usually calculated based on a percentage of the interest you would have earned on the funds withdrawn.

Monthly income bonds

Monthly income bonds allow you to earn monthly interest on your savings, but unlike a fixed rate bond, you can take your money out whenever you need to. The interest rate you get on a monthly income bond will normally be variable, meaning it will go up and down due to inflation and other factors.

Monthly income bonds tend to offer lower interest rates than fixed rate bonds, but are more flexible as you can access your money when you need it and the income you earn will tend to keep pace with inflation.

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