Best Fixed Rate Bonds Up to 1 Year

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

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What term duration is best?

‘Up to one-year bonds’ is a broad name given to any fixed savings account with a term of less than 12 months. For instance, you’ll find three-month bonds, six-month bonds and nine-month bonds all feature on our chart above.

The best term will ultimately depend on your savings goal and personal circumstances; remember, as most fixed bonds prohibit early access, you must be comfortable locking away your money for the duration of whichever term you choose.

Typically, bonds of less than a year may be preferred by those with a short-term savings goal, such as an upcoming holiday or big-ticket purchase. However, you can secure guaranteed returns for longer with a one-year fixed bond, two-year fixed bond, three-year fixed bond or even a five-year fixed bond.

What happens at the end of the term?

Once a fixed bond reaches the end of its term (or ‘matures’), a provider will either return your money plus interest to the account from which you originally transferred, or move the funds to another savings account.

In some cases, this may be an easy access account; while this allows you to withdraw your funds without restrictions, be wary of letting your savings sit in a low-paying account for too long. In contrast, other providers may automatically reinvest your savings into another fixed bond if you don’t withdraw your cash within a given timeframe.

While some banks and building societies will contact you regarding your options prior to a bond maturing, it’s always best to check the small print for further details on what happens at the end of the term before opening an account.

Fixed bonds vs notice savings accounts

Fixed bonds and notice accounts are both potentially higher-paying alternatives to easy access savings accounts.

When it comes to notice accounts, the best rates are typically offered by products requiring a longer notice period, and this can sometimes mean waiting up to six months or more before gaining access to your cash.

Therefore, you may wonder whether you should opt for a short-term fixed rate bond instead; we explain the key differences between these types of savings accounts below:

	Pros	Cons
Fixed Bonds	Offer guaranteed returns, meaning the interest rate won’t change throughout the term.	Withdrawals are prohibited. Additions to your pot are limited to a small window after opening, if permitted at all.
Notice Accounts	Permit withdrawals, subject to serving notice. Accept further deposits without restriction.	Offer a variable interest rate which could go down as well as up. Most traditional notice accounts don’t offer the option for early access without serving notice.

What are the alternatives to a short-term fixed rate bond?

If you earn enough interest on your savings to be at risk of exceeding your Personal Savings Allowance (PSA), you could consider a short-term fixed ISA as a tax-free alternative to an up to one-year fixed bond.

Like fixed bonds, fixed ISAs come with a variety of different terms; fixed ISAs of less than a year or one-year fixed ISAs could also suit those with a short-term savings goal. You can compare the best rates for different types of accounts using our dedicated savings charts.