Best 18 Month Fixed Rate Bonds

Depositor Protection

Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme (FSCS) up to a maximum level of protection of £85,000 per person per institution. All new savings or bank accounts provided to UK customers are now covered by the FSCS.

Disclaimer

All rates subject to change without notice. Please check all rates and terms before investing or borrowing.

Provider Links

‘Go To Provider's Site’ links are where we have an arrangement with a provider so you can move directly from our site to theirs to view more information and apply for a product. We also use ‘Speak to A Broker’ links where we have an arrangement with a preferred broker to move you directly to their site. Depending on the arrangement we may receive a modest commission either when you press a 'Go To Provider's Site' or 'Speak To A Broker' button, when you call an advertised number or when you complete an application following a link from our website.

Favourites

By clicking the heart icon next to each product will mark that product as a favourite. A product will be remembered as a favourite until you deselect it or for 14 days (assuming you have functional cookies enabled). There is an option to sort by ‘Favourites First’ which will bring your favourites to the top of the chart.

How does an 18-month fixed rate bond work?

When you open an 18-month fixed rate bond, you typically need to deposit a lump sum in the account. The provider will usually specify the minimum opening deposit required and, depending on the individual terms of the account, you may be able to continue to add to your account for a limited amount of time.

The interest rate on an 18-month bond is fixed, which means it won’t change for the duration of the term and the return on your money is guaranteed. You may be able to choose to have the interest paid on anniversary, on maturity or monthly, for example.

Note that, as with the majority of fixed bonds, most 18-month bonds won’t allow you to withdraw your money before the end of the term,

Is an 18-month fixed rate bond safe?

Your money should be as safe in an 18-month fixed rate bond as in any other type of savings account.

All savings providers need to be regulated by the Financial Conduct Authority (FCA) and the money you deposit is protected by the Financial Services Compensation Scheme (FSCS).

The FSCS will compensate you for any money you lose if a savings provider fails, up to a maximum of £85,000 per provider. Make sure you check which providers share a banking licence as the maximum limit applies to your total deposits under each licence, not each individual provider.

Is an 18-month fixed rate bond right for me?

An 18-month fixed rate bond may be worth considering if you are comfortable locking away your money for more than one year but don’t want to commit to two years or longer.

These bonds allow you to secure a guaranteed rate of interest for 18 months, which can be appealing if you know you won’t need to use the money for this length of time.

However, if you think there’s a chance that you will need to access your savings in the next year and a half, this type of fixed rate bond may not be the right option for you.

Alternatives to fixed rate bonds

If a fixed bond isn’t right for you, there are other types of savings accounts that may be more suitable for your situation, including:

Easy access accounts: These are ideal if you want to be able to add to and withdraw from your savings when you choose (although look out for any restrictions that individual providers may apply).
Notice accounts: A kind of halfway house between fixed bonds and easy access accounts, these allow you to withdraw from your savings but only after giving a set amount of notice.
Regular savings accounts: If you want to deposit into savings every month, instead of depositing a lump sum immediately, a regular savings account is likely to be more suitable than a fixed bond.
Individual savings accounts (ISAs): If you’re concerned about breaching your Personal Savings Allowance (PSA) and paying tax on the interest you earn on your savings, an ISA may be worth considering. ISAs allow you to deposit up to £20,000 per year and any interest you earn is exempt from tax.