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Fixed rate savings bonds

In a climate of uncertainty, it’s reassuring to put your money into a savings account that provides a guaranteed rate of return. Fixed rate savings bonds offer a set rate of interest for the life of the bond – also known as the bond term, which can last anything between 6 months and five years. However, if you need the flexibility of being able to access your savings without penalty, then fixed rate savings might not be for you because your cash is usually locked up for the term. However, if you are confident you can keep your savings tied up – perhaps you’re saving for a home extension or a new car – then fixed rate savings bonds offer good returns.

How to find the best fixed rate savings bonds

The first thing to think about if you’re looking to go for a fixed rate bond, is how long you want to fix for. If you’re happy to fix for up to five years you can probably secure the very best fixed rates on the savings market. The thing to remember when doing this, is that you are also taking the risk that interest rates won’t rise significantly in that five year period (or however long the term is). Obviously if you take out a 5 year fixed bond when the base rate is at 0.5%, you run the risk that your fixed interest rate could become uncompetitive, diminishing your returns relative to the rest of the market. Go for a 2 or 3 year fixed rate savings bond however, and you’ll be able to switch to a better rate more quickly.

The benefits of fixed interest rate savings bonds

If you value stability and like to know exactly what your savings are earning, then a fixed rate bond certainly lets you know exactly where your finances are up to. Other advantages of 1-5 year savings bonds include:-

Compare fixed rate savings bonds

You might want to go for a 5 year fixed rate bond to get the very best interest rates, but as mentioned you should consider carefully if this is wise, given the current prevailing low interest rates. As with any investment product, it pays to take your time and get professional financial advice before committing to a product. Once you’ve worked out what length of fixed rate bond term you want, it’s simply down to finding the bond that meets your criteria – our fixed rate savings bond comparison tables can help you find the right product in minutes.

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