Compare fixed rate bonds

If you’re looking to invest a lump sum, a fixed rate bond could be perfect. It pays a guaranteed amount of interest for a set length of time. You probably won’t be allowed to access your savings during the fixed term, so invest money you can afford to lock away.

These are the best accounts available to open through MoneySuperMarket. We can show you all the accounts on the market, but we can only help you to open some of them.

Short term fixed rate bonds - Ordered by rate (AER)

  1. Great for
    Fast and simple online application
    FSCS protection for your deposit
    All deposits used to support the growth of enterpreneurial businesses in the UK
    But be aware that
    Additional deposits, early account closure and withdrawals are not permitted within the fixed term
  2. Great for
    Choose between annual interest of 1.26% Gross/AER fixed or monthly interest of 1.25% Gross/1.26% AER fixed
    Viewing your account online with Tesco Bank's secure Online Banking service
    But be aware that
    One single deposit within the first 30 days of account opening. Once you put your money in you can't close your account early or get your money out until the end of the term .
    Your interest will be paid into an account nominated by you.
    To apply you must be a UK resident and 18 years of age or over.
  3. Great for
    Interest options: monthly, quarterly, annually or upon maturity, with automatic roll-over option
    Quick and easy online application process
    FSCS compensation scheme
    But be aware that
    Withdrawals are not permitted within the fixed term
  4. Great for
    Online application and access
    A choice between monthly or annual interest
    UK bank with FSCS protection up to £75,000
    But be aware that
    Withdrawals are not permitted within the fixed term
  5. Great for
    Allows unlimited top-ups for first 30 days
    Support seven days a week and a choice of monthly or annual interest
    Part of Renault’s global banking group
    But be aware that
    RCI Bank is part of a French banking group and the first €100,000 equivalent is protected by the French deposit guarantee scheme, rather than by the UK FSCS scheme which protects the first £75,000
  6. Great for
    Online application and management
    Bank of Cyprus UK is a UK based bank so the first £75,000 of your cash is fully protected under the FSCS (Financial Services Compensation Scheme)
    But be aware that
    Withdrawals are not permitted within the fixed term

Two year fixed rate bonds - Ordered by rate (AER)

  1. Great for
    Fast and simple online application
    FSCS protection for your deposit
    All deposits used to support the growth of enterpreneurial businesses in the UK
    But be aware that
    Additional deposits, early account closure and withdrawals are not permitted within the fixed term
  2. Great for
    Choose between annual interest of 1.52% Gross/AER fixed or monthly interest of 1.51% Gross/1.52% AER fixed
    Viewing your account online with Tesco Bank's secure Online Banking service
    But be aware that
    One single deposit within the first 30 days of account opening. Once you put your money in you can't close your account early or get your money out until the end of the term.
    Your interest will be paid into an account nominated by you.
    To apply you must be a UK resident and 18 years of age or over.
  3. Great for
    A guaranteed rate of interest for the full term of the product
    Available as a sole or joint account
    FSCS protection up to £75,000 per depositor
    But be aware that
    Early withdrawals are subject to a penalty
    Available to UK residents aged 18 or over who have an account with an existing UK bank
  4. Great for
    Allows unlimited top-ups for first 30 days
    Support seven days a week and a choice of monthly or annual interest
    Part of Renault’s global banking group
    But be aware that
    RCI Bank is part of a French banking group and the first €100,000 equivalent is protected by the French deposit guarantee scheme, rather than by the UK FSCS scheme which protects the first £75,000

Three year fixed rate bonds - Ordered by rate (AER)

  1. Great for
    Choose between annual interest of 1.62% Gross/AER fixed or monthly interest of 1.61% Gross/1.62% AER fixed
    Viewing your account online with Tesco Bank's secure Online Banking service
    But be aware that
    One single deposit within the first 30 days of account opening. Once you put your money in you can't close your account early or get your money out until the end of the term.
    Your interest will be paid into an account nominated by you.
    To apply you must be a UK resident and 18 years of age or over.
  2. Great for
    A guaranteed rate of interest for the full term of the product
    Available as a sole or joint account
    FSCS protection up to £75,000 per depositor
    But be aware that
    Early withdrawals are subject to a penalty
    Available to UK residents aged 18 or over who have an account with an existing UK bank
  3. Great for
    Allows unlimited top-ups for first 30 days
    Support seven days a week and a choice of monthly or annual interest
    Part of Renault’s global banking group
    But be aware that
    RCI Bank is part of a French banking group and the first €100,000 equivalent is protected by the French deposit guarantee scheme, rather than by the UK FSCS scheme which protects the first £75,000

Four year fixed rate bonds - Ordered by rate (AER)

  1. Great for
    UK based bank with FSCS protection
    A choice between monthly or annual interest
    Supported by a dedicated UK based customer service team
    But be aware that
    Additional deposits and withdrawals are not permitted within the fixed term
  2. Great for
    Choose between annual interest of 1.64% Gross/AER fixed or monthly interest of 1.63% Gross/1.64% AER fixed
    Viewing your account online with Tesco Bank's secure Online Banking service
    But be aware that
    One single deposit within the first 30 days of account opening. Once you put your money in you can't close your account early or get your money out until the end of the term.
    Your interest will be paid into an account nominated by you.
    To apply you must be a UK resident and 18 years of age or over.

Five year fixed rate bonds - Ordered by rate (AER)

  1. Great for
    UK based bank with FSCS protection
    A choice between monthly or annual interest
    Supported by a dedicated UK based customer service team
    But be aware that
    Additional deposits and withdrawals are not permitted within the fixed term
  2. Great for
    A guaranteed rate of interest for the full term of the product
    Available as a sole or joint account
    FSCS protection up to £75,000 per depositor
    But be aware that
    Early withdrawals are subject to a penalty
    Available to UK residents aged 18 or over who have an account with an existing UK bank
  3. Great for
    Choose between annual interest of 1.87% Gross/AER fixed or monthly interest of 1.85% Gross/1.87% AER fixed
    Viewing your account online with Tesco Bank's secure Online Banking service
    But be aware that
    One single deposit within the first 30 days of account opening. Once you put your money in you can't close your account early or get your money out until the end of the term.
    Your interest will be paid into an account nominated by you.
    To apply you must be a UK resident and 18 years of age or over.
  4. Great for
    Interest options: monthly, quarterly, annually or upon maturity, with automatic roll-over option
    Quick and easy online application process
    FSCS compensation scheme
    But be aware that
    Withdrawals are not permitted within the fixed term
    You must be aged 18 or over

Not sure what account is right for you?

 

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.

Thanks to the introduction of the new Personal Savings Allowance (PSA) in April 2016, banks and building societies now pay interest on all savings accounts gross, or before any tax is deducted. The PSA means that basic-rate taxpayers can earn £1,000 of savings interest without the taxman taking a slice, and higher rate taxpayers can earn £500. Additional rate taxpayers are not eligible for a PSA. If the interest you earn exceeds these limits, any tax you owe will usually be collected via the Pay As You Earn (PAYE) system or via your self-assessment tax return.

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 £75,000 (as of January 2016). Please ensure you check this as some banks and organisations do not offer FSCS cover and therefore there is a risk to your deposit when opting to save your money with that organisation.

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. What’s 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.

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