Best 5 Year Business Bond Rates UK

Note

Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme up to a maximum level of protection of £85,000 per business per institution. The deposits of most non-financial services businesses are covered up to the £85,000 limit.

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5 year business bonds explained

Is fixing for five years a good idea?

Fixing for this length of time can be a great solution for business owners who don’t mind losing access to their funds for five years, and who want to secure guaranteed returns on their savings. The money will be earning interest at a set rate which means you can comfortably plan ahead, as you know exactly how much you’ll be left with at the end of the term.

The downside is that your money will need to be locked away for the full five years, so it’s wise to have more accessible savings elsewhere too. In the current market, shorter-term business savings bonds often have higher interest rates as well, which means opening a one-year bond could be a great option too.

Can I withdraw my savings during the term?

No. Five-year business savings bonds rarely allow withdrawals, so you’ll need to be able to commit your funds for the full term. Most won’t allow you to add to the pot either – though a few will permit additions for a limited period – and always check when interest will be paid to ensure it works for you and your business. For example, while most bonds of this length will pay interest yearly or on maturity, a few will pay out monthly, which offers the potential for your business to have extra funds coming in while keeping the lump sum secure.

Can the interest rate change during the term?

No. Once set, fixed rates cannot be changed, so you can be certain that you’ll be earning interest at the agreed rate for the duration of the bond. This provides welcome security at a time when interest rates can fluctuate, as external market conditions will have no impact on your returns.

Which bank offers the best rate?

This can vary, which means it’s vital to make sure you compare rates thoroughly using our dedicated business savings bond chart. Note that not many mainstream banks and building societies operate in this sector, which means you’ll likely need to look to more specialist providers for the best deals. But don’t let that put you off – names such as State Bank of India and UBL UK may not sound familiar, but they come with the same level of FSCS protection as more well-known brands, while offering some of the best rates for business savings bonds in the UK. Use our chart to get a feel for what’s available and start your comparison today.