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Three-year fixed rate bonds (also called three-year fixed rate savings accounts) are a type of savings account that offer an interest rate guaranteed to stay the same over a three-year period. This is in contrast to other types of savings accounts, such as easy access accounts, with interest rates that can rise or fall at any time (known as variable savings accounts).
Keep reading to learn more about three-year fixed rate bonds, or compare some of the best three-year fixed rate savings accounts using the chart from Moneyfactscompare.co.uk above.
Three-year fixed rate bonds can be opened online, in branch, by post, over the phone or using a mobile app (depending on the specific account and provider). To be eligible, you'll usually need to be a UK resident aged at least 16 or 18.
Most three-year bonds also require you to have a lump sum - often between £1,000 and £10,000. However, you may find accounts that ask for smaller or even higher minimum opening deposits.
The reason three-year fixed rate bonds are more suitable for lump sum savings is because most don't let you contribute to your account whenever you want. Instead, further additions are usually restricted to a short window from opening - around seven to 14 days - if allowed at all.
Like most fixed savings accounts, you must be prepared to forgo access to your cash for the duration of the fixed term (in this case, three years) as withdrawals aren't permitted. While some three-year fixed bonds may allow early access (before the term ends), this is often subject to a loss of interest penalty and/or account closure.
Interest can be paid monthly, quarterly, yearly or on maturity with a three-year fixed rate bond (depending on the specific account and provider). It will either be added to your account balance or paid away into another account (such as your current account).
Having monthly interest paid away into a bank account could be a good option if you want to take home a regular income from your fixed bond. However, leaving it in the account (where it stands to benefit from the effects of compounding) could help your money grow more substantially.
Once your three-year bond reaches maturity (i.e. the fixed term ends), you’ll regain access to the cash in your account. Your savings provider should be in touch before this happens to explain your options, which might include:
If you do nothing, your account will usually revert to a standard variable rate savings account.
Yes, three-year fixed rate bonds are safe so long as they are covered by the Financial Services Compensation Scheme (FSCS). The FSCS protects deposits of up to £120,000 per person, per banking licence should a provider go bust (discover which financial institutions share banking licences with our guide to who owns whom).
Rest assured that all the savings accounts featured on Moneyfactscompare.co.uk charts are covered by the FSCS.
There’s a risk your money could lose value in real terms to inflation while sitting in a three-year bond. Although you can mitigate this risk by opting for an account that offers an interest rate higher than the current rate of inflation, it might be unavoidable if the cost of living rises more rapidly during the three-year term. Learn more about how inflation affects your finances.
What’s more, you risk missing out on better returns if interest rates were to rise across the wider market throughout the fixed term.
The rate you receive won't change during the three-year term which could protect your savings if rates were to fall across the wider market.
Traditionally offer higher returns than variable accounts and shorter-term bonds (although this isn't always the case, so be sure to check the latest top rates).
Could be a good middle ground between locking your funds away for a short or longer term.
Withdrawals are usually prohibited. While some accounts allow early access, this is often subject to a loss of interest penalty and/or account closure.
Further additions are typically only allowed for a short amount of time after opening - if permitted at all.
Inflation could erode the value of your money in real terms if it rises above the rate paid by your three-year fixed bond.
Could miss out on better returns if interest rates were to rise.
You'll only need to pay tax on the interest earned from a three-year fixed bond if it exceeds your Personal Savings Allowance (PSA). This is the maximum amount of interest you can take home from savings between 6 April and 5 April each year before being taxed.
| Income tax band | Personal Savings Allowance |
| Basic rate (20%) | £1,000 |
| Higher rate (40%) | £500 |
| Additional rate (45%) | £0 |
Our lump sum savings calculator gives an idea of how much interest you might earn from a three-year bond. If it looks like you might go above your PSA, why not consider a three-year fixed rate ISA instead?
Three-year fixed rate cash ISAs share many similarities with three-year bonds – the main one being they both offer interest rates that won’t change over a three-year term.
But, like all Individual Savings Accounts (ISAs), any returns earned from a three-year fixed ISA are automatically tax-free – which could make them an appealing option for savers at risk of breaching their PSA.
However, you can only stash a combined total of £20,000 across all ISAs per tax-year – a potential downside for anyone with a larger deposit.
If it’s likely you’ll need access to your cash in the next few years, a three-year bond may not be the most suitable choice. Instead, you could explore shorter-term options, such as two-year bonds, 18-month bonds, one-year bonds or even bonds of less than a year. Alternatively, for an account that offers greater flexibility when making withdrawals, you might want to consider easy access or notice savings accounts.
On the other hand, if you want to secure a guaranteed rate for even longer, you could consider four-year bonds or five-year bonds.
Most three-year savings bonds don’t come with any fees. However, some accounts are only available to customers with a linked current account (which sometimes charge a fee).
Many of the most competitive three-year bonds pay well above 4.00% AER as of June 2026. Compare the latest top savings rates using charts from Moneyfactscompare.co.uk.
Yes – it’s possible to find three-year fixed rate bonds that can be opened with as little as £1. However, keep in mind that most fixed bonds only accept further contributions for a short amount of time after opening (if at all). Therefore, they may not be the most suitable option for those looking to save little and often.
By contrast, easy access accounts and notice accounts usually accept further additions at any time without restriction. Alternatively, you could consider a regular savings account (some of which offer fixed rates and require minimum monthly deposits).
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Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
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