Best 1 Year Fixed Rate Bonds

A guide to one-year fixed rate bonds

What is a one-year fixed rate bond and how does it work?

A one-year fixed rate bond is a type of savings account that pays a fixed rate of interest for one year but, in return, you can’t normally withdraw from your savings during this period.

This means the bank, building society or other savings provider will pay the advertised interest rate for the full length of the term, providing you with a predictable and guaranteed return on your money. There’s no risk that the interest rate will fall.

In most cases, fixed rate one-year bonds won’t allow withdrawals during the term, and you may not be able to make any further deposits into the account after opening.

This means it’s crucial to plan ahead and think carefully about how much you deposit in one of these accounts.

When the one-year term ends, known as reaching maturity, you can access the initial sum deposited and the interest it earned.

There will typically be minimum opening deposit requirements – the very best one-year fixed rate bonds may require a larger investment of at least £1,000 or even £10,000.

It’s important not to get one-year fixed bonds confused with investment bonds. While your money is at risk in an investment bond, money in a fixed rate bond (or savings account) earns a guaranteed rate of interest and is protected under the Financial Services Compensation Scheme (FSCS).

Can I add more money to my one-year fixed rate bond?

It depends on the provider as to whether you can add money to your fixed-rate bond after opening.

Some providers only allow you to make one deposit at the point of opening, but others may allow further deposits for a limited period, such as 10 days, 28 days or while the issue remains open.

Click “further details” next to an account on our chart to see if additional contributions are permitted after the initial deposit.

Can I choose how often my interest is paid on a one-year fixed rate bond?

Whether you can choose the way interest is paid depends on the provider. Some providers may be able to pay interest monthly, on anniversary or on maturity, for example, depending on your preferences, while other providers will only pay interest in one way.

You can see how different accounts pay interest, and whether there is a choice, by viewing our chart above.

What is the best one-year fixed rate bond?

In the middle of August 2025, the best one-year fixed rates paid in excess of 4.35% AER, lower than the top rates on offer one month earlier.

This decline isn’t surprising as the industry expected the Bank of England’s base rate to fall on 7 August (which it did by 0.25 percentage points), which means many providers have been cutting interest rates accordingly over the past few weeks.

Because providers can amend rates and products relatively quickly, so the rates currently available may have changed since writing. For the latest list of the best one-year fixed rate savings accounts, see our regularly-updated chart above.

It’s important to note that, even though the interest rate will be a key factor in choosing an account, there are various products on the market that will appeal to different savers. In addition to the interest rate, the best account for you may also depend on:

• the minimum deposit requirements
• the ways you can open and manage your account
• how interest is paid
• whether you can add to your savings after opening
• customer reviews of the provider.

Best one-year fixed rate bonds for over-60s

There’s no particular provider or one-year bond that is the “best” for over-60s. The best one-year bonds for pensioners and older savers will depend on their saving goals, individual situations and own preferences.

As explained above, while accounts that pay the highest interest will typically be the most appealing, it’s important to consider other features of the account too.

For example, while a one-year bond with a minimum deposit requirement of £10,000 may be suitable for someone wanting to lock away a large sum for this period, another saver wanting to put £5,000 into a one-year bond would need to find a different provider with a lower deposit requirement.

Similarly, the ways of opening and managing an account can influence which option is best for you. For example, someone who wants to open their account in person may favour an account from a provider with high street branches, whereas someone who is comfortable managing their savings online may consider digital-only providers.

How do interest rates on one-year fixed rate bonds compare to longer-term bonds?

Longer-term fixed bonds usually pay a higher rate of interest than one-year bonds as providers typically offer better rates in exchange for locking away your money for longer. Indeed, in August, the top five-year fixed bonds offer a higher return than their one-year counterparts.

However, this situation hasn’t always been the case in recent months and years as the top short-term bonds often outperformed the top long-term bonds. This is because providers expected the base rate to fall, which meant many set the interest rates on their long-term savings accounts at a lower level than their short-term fixes.

Even though the average one-year fixed rate (at 4.01%) remains higher than the average rate of 3.88% on longer-term bonds (accounts with terms of 550 days or more) at the start of August, according to Moneyfacts’ data, the gap between these figures has been gradually shrinking over the past year.

For an up-to-date comparison of one-year bonds with longer-term accounts, see our chart above and visit our three- and five-year bond charts.

Can interest rates change during the one-year term?

No. Once you’ve set up the account, the interest rate is fixed and won’t change over the one-year term. This can provide a great deal of security and means you’re guaranteed to get the interest you expect.

However, it can also be a downside for some savers, as if interest rates were to rise during the year, you wouldn’t be able to move your money to a different account to take advantage of them.

In contrast to fixed accounts, variable savings accounts could start to pay a higher or lower rate than when you initially opened the account as providers are able to change the interest rate on these accounts whenever they choose.

Can you extend or shorten the one-year term?

No. As with the rate itself, once you’ve agreed on the term, it cannot be changed. This is true for all fixed rate bonds and fixed ISAs of any term length.

The only options are to access your funds early, if allowed (subject to an interest penalty), or wait until the bond has matured to reinvest the funds into a new account.

Is a one-year fixed rate bond suitable for me?

A year is a relatively short time to lock your money away, which means one-year fixed rate bonds can be ideal for anyone considering a short-term savings option.

However, due to the restrictions on withdrawals, you must be certain that you won’t need access to these funds during the term.

Can I use a one-year fixed rate bond to save for a specific goal?

Yes, one-year bonds can be useful for saving towards a specific goal, such as home improvements, a wedding, a holiday, a new car or another expensive purchase.

If you know you won’t need the money for at least one year, putting it in a one-year bond allows it to earn guaranteed interest and means you won’t be tempted to dip into your savings for any other purpose.

What happens at the end of a one-year fixed bond?

At the end of the one-year term your funds will be released. Your provider should contact you ahead of this to outline the options available, allowing you to choose what you do with your money.

For example, you could choose to reinvest your money into a new fixed bond or move it to an easy access account with the same provider. Alternatively, you could cash in your savings and have the money transferred to your current account (or other nominated account).

What happens if I don’t provide instructions before my bond matures?

If you don’t tell the provider what you want to happen at the end of the fixed term, the provider will make the decision for you.

Some providers may automatically reinvest your savings into a new one-year fixed rate bond, while others may move it into a low-paying variable rate account. When the provider contacts you with your options, it will say what will happen to your money if you don’t do anything.

What are the alternatives to a one-year fixed rate bond?

If a one-year bond isn’t quite right for you, there are other savings options you could consider instead.

• Easy access accounts allow you to dip in and out of your savings without penalty, so will be appealing if you’re not comfortable locking your money away.
• Notice accounts are similar as you can access your money when necessary, but you will need to wait a specified number of days (known as the notice period) before receiving any withdrawals.
• Fixed bonds of up to one year can be an attractive compromise if you don’t mind locking your money away but want a slightly shorter term than one year.
• Longer-term fixed bonds such as two- or three-year bonds may be of interest if you feel confident about committing to a longer period.
• ISAs could be an option if you’re worried about being taxed on your savings interest. Even if you’re not immediately at risk, ISAs may still be worth considering to potentially protect your money from tax in the future. There are easy access ISAs and fixed ISAs available, including ISAs with one-year fixed terms.