Two Year Fixed Rate Business Bonds

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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2 year business bonds explained

Is fixing for two years a good idea?

Opting to fix your interest rate for two years can be a great idea for those businesses that don’t mind losing access to a portion of their business savings. It allows a lump sum investment to be consistently earning interest over those two years, and because it’s at a fixed rate you know exactly what your balance will be at the end of the term, ensuring you can effectively plan your cashflow.

It can be particularly suitable for those businesses who are planning to expand in two years’ time, letting their cash work as hard as possible in the interim to then provide the necessary funding. The downside is that the money won’t be accessible for the full term, so those who can’t commit to this length of time may want to consider a one-year business bond instead.

Can I withdraw my savings during the term?

Not usually. Very few – if any – providers will allow early access, which means you’ll need to keep your business funds untouched for the full two-year term. Some will allow further additions to be made, but usually only for a limited period when you first take out the bond.

Can the interest rate change during the term?

No. Because it’s a fixed rate account, the interest rate is guaranteed to stay the same for the duration of the term, regardless of what happens elsewhere in the market. If you’d like even longer-term security, opting for a five-year business bond could be a great option.

Which bank offers the best rate?

This can change a lot depending on when you search. Banks and building societies are continually updating their rates, which makes it vital to compare the options thoroughly. You should consider everything from the interest rate offered to the account management options, and always check the criteria, as different banks have different requirements. Our chart above outlines the very best business savings bonds in the UK, from well-known brands like Virgin Money to lesser-known names such as UBL UK, making it easy to find the deal that’s right for you and your business.