Best Fixed Rate Saving Bonds

Home > Savings Accounts > Fixed Rate Bonds

Fixed-rate bonds are a great way for savers to know exactly how much they will earn on their savings for a fixed amount of time. Most people save cash for different purposes, including short-, medium- and long-term goals. To secure a better interest rate on your interest-paying savings accounts, it makes sense to put any money you have earmarked for the longer term into a fixed-rate bond.

What are fixed-rate bonds?

A fixed-rate bond is just a savings account in which your money is locked away for a set time period, with a guaranteed interest rate applied. Your money is out of reach for a while, but if you know you won’t need to access it for a while, you might as well make it work as hard as possible.

Generally speaking, the longer you can lock your money away, the better the rate you will get. You can choose from long- and short-term fixed-rate bonds. For example, a short-term bond might have a three- or six-month term, while a longer-term fixed-rate bond might run for between one and seven years. The amount of interest you can earn will also vary depending on the size of savings.

Larger amounts command higher rates. For example, locking £50,000 or more away in five-year fixed-term bond could earn you 2.25% a year, compared to 2.15% on £10,000 of savings. Not a huge difference but it could will add up over five years.

Pros and cons of fixed-rate bonds

Your money is safe in a fixed-rate bond as long as the provider is regulated by the Financial Conduct Authority, the watchdog for the financial services industry.

Up to £85,000 of your money per provider is protected under the Financial Services Compensation Scheme in the unlikely event your bank or building society goes bust. You can earn better rates than you would in an easy-access account.

However, most will have restrictions or penalty charges around withdrawals so you’re taking the risk that you won’t be able to get to your money if you suddenly need it.

What are the best fixed-term bond rates on the market?

Here are a few of the best deals around at the moment based on a £1,000 deposit. However, rates change quickly so do your own research using best buy tables.

  1. Gatehouse Bank 5 Year Fixed Term Woodland Saver – AER 5.10%
  2. Gatehouse Bank 2 Year Fixed Term Woodland Saver – AER 4.80%
  3. Paragon Bank 5-Year Fixed Rate Savings Account – AER 4.65%
  4. Investec Bank plc Raisin UK – 2 Year Fixed Term Deposit – AER 4.61%
  5. Paragon Bank Green 3-Year Fixed Rate Savings Account – AER 4.61%
  6. Aldermore 2-Year Fixed Rate Account – AER 4.60%
  7. Aldermore 3-Year Fixed Rate Account – AER 4.60%

Fixed-rate bond alternatives

The main disadvantage of fixed-rate bonds is that your money is locked away for a set period. There are other accounts on the market that offer high-interest rate, where you can still access your money One of the best ways to search the market for better interest rates than you get with easy access accounts is to use Hargreaves Lansdown’s Active Savings account where you can spread your savings around a range of providers who offer high-interest rates.

Here is a list of some of the best savings account offers on the market at the moment:

Savings PlatformHighest Interest RateSavings AccountsMinimum DepositFSCS ProtectedGMG RatingMore Info
Hargreaves Lansdown Active Savings5.11%17£1,000✔️
See Rates
raisin Savings Account5.4%64£1✔️
See Rates

You may also be interested in these other types of savings accounts:

Scroll to Top