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
    High interest, short term bonds with a fixed rate for the term of the deposit
    Apply for this product online
    FSCS protected up to £75,000 per investor
    But be aware that
    No early withdrawals or closures allowed
    You must be over 18 and a UK resident to open this account
    You must fund your account within 30 days of the account opening date
  2. 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
  3. 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
  4. Great for
    High interest, short term bonds with a fixed rate for the term of the deposit
    Apply for this product online
    FSCS protected up to £75,000 per investor
    But be aware that
    No early withdrawals or closures allowed
    You must be over 18 and a UK resident to open this account
    You must fund your account within 30 days of the account opening date
    • Provider/Product name Fixed Rate Saver

      Sainsbury's Bank

      Fixed Rate Saver

    • Interest rate (AER) 1.30% Fixed
    • Min/Max opening amount £5,000 to £200,000
    • Notice / Term Term: 1 year bond
    • Account type Fixed Rate Bond
    • Access Internet Post Telephone In Branch
    • Go to site

    Great for
    A choice between monthly or annual interest
    Available to new and existing customers
    But be aware that
    Withdrawals or early closures are not permitted within the fixed term
    No additional deposits can be made after 30 days from opening your account
    You must be aged 18 or over and a UK resident
  5. 2016 SUPERS

    Winner of the Best Savings Account Provider

    Great for
    Simple online application
    But be aware that
    Withdrawals are not permitted within the fixed term
  6. Great for online

    Great for online application and ability to view your account online

    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

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
    • Provider/Product name Fixed Rate Saver

      Sainsbury's Bank

      Fixed Rate Saver

    • Interest rate (AER) 1.55% Fixed
    • Min/Max opening amount £5,000 to £200,000
    • Notice / Term Term: 2 year bond
    • Account type Fixed Rate Bond
    • Access Internet Post Telephone In Branch
    • Go to site

    Great for
    A choice between monthly or annual interest
    Available to new and existing customers
    But be aware that
    Withdrawals or early closures are not permitted within the fixed term
    No additional deposits can be made after 30 days from opening your account
    You must be aged 18 or over and a UK resident
  2. 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
  3. 2016 SUPERS

    Winner of the Best Savings Account Provider

    Great for
    Opening and viewing your account online
    But be aware that
    Withdrawals are not permitted within the fixed term

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

  1. 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
  2. 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
  3. 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
  4. 2016 SUPERS

    Winner of the Best Savings Account Provider

    Great for
    Opening and viewing your account online
    But be aware that
    Withdrawals are not permitted within the fixed term

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

  1. Great for
    Managing your account online or in branch
    A choice between interest paid annually or on maturity
    FSCS protected
    But be aware that
    Additional deposits, early account closure and withdrawals are not permitted within the fixed term
  2. 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
  3. 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

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.

Read more

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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