What is a Fixed Rate Bond?
A fixed rate bond is a savings account that you keep for a specific time called the term, typically between one and five years.
The rate of interest you earn during that term won't change, but you won't be able to take your money out.
When you open a fixed rate bond you usually only make one deposit, ideal if you have a lump you want to put away and not touch.
Is a Fixed Rate Bond right for you?
It could be right if:
- You want a fixed rate of interest over a set period.
- You have a lump sum to invest.
- You don't need to take out your money during the fixed period.
It might not be right if:
- You want to deposit money whenever you feel like it.
- You want to be able to take money out when you like.
- You need savings to help with living costs and emergencies.
FAQs
How much money can pay in?
This can differ by provider and product. Typically we require a minimum deposit of £1,000 up to a maximum £1,000,0000 or £2,000,000 for joint accounts. Please check the account terms and conditions for details.
Can I take money out?
Usually, you can't take money out of fixed rate bonds until the end of the term, so it's important that you have other savings you can use for an emergency.
What happens at the end of the term?
When your bond matures you will be be made aware of your options, including how you can re-invest or take out your savings. We typically write to our customers 14 days in advance to let them know their options.
If you don't let us know then we'll transfer your savings into an alternative product. It's best to let us know what you want if you can.
Can the interest rate change?
No, that’s the beauty of a fixed rate bond, your interest rate won't change during the fixed term.
Can I have more than one fixed rate bond?
Yes, you can have as many fixed rate bonds as you like.
Do I pay tax on the interest?
You might pay tax on the interest earned from a fixed rate bond. Most people can earn some interest on their savings without paying tax though.
The amount of tax you pay is different for each person and can depend on a number of factors.
If you want a fixed rate savings account where you don’t have to pay tax on your interest you can look at our range of fixed rate ISAs.
