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Interest Earned
This is an estimate of how much interest you could earn in the first year. It does not take into account your personal circumstances so the actual amount received may differ. The calculation is based on the gross rate; takes into consideration the interest paid frequency and includes the following assumptions:
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‘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, on our chart above you may find:
These accounts pay a fixed rate of interest for the specified number of months, which means the interest rate won’t change and you’ll receive a guaranteed return on your money.
However, you won’t typically be able to access your savings during this period.
Bear in mind that these fixed rate bonds are a type of savings account; they are not an investment bond.
As with most savings accounts, fixed rate bonds with terms of less than one year typically require a minimum deposit. Some providers may ask for a sizeable opening deposit of £10,000 or more, while other accounts may only require a deposit of £1,000 or potentially even less.
You can see the minimum deposit requirements of each account by clicking “product specification” next to a listing on the chart above.
Bear in mind that you may only be able to make one deposit into your account when you first open it. However, other providers may allow you to add to your savings for a limited period after opening, such as 14 days.
Fixed bonds of up to one year can be good for all kinds of savers who want to earn a fixed rate of interest on a lump sum of money that they won’t need to access for a number of months.
For example, they may appeal to savers who:
Fixed bonds with a term of several months could also appeal to proficient savers who divide their money between different accounts to hedge their bets against interest rate changes. A savings strategy known as “laddering” is when savers put a portion of their money into different fixed bonds that mature at different times so, for example, an individual could have some of their savings in a six-month bond and some in a one-year bond.
This allows them to gain access to some of their money after six months, with the one-year bond maturing six months after this. When the fixed term expires, savers can choose to lock away their money into a fixed bond again (unless they need to use their money for another expense, for example). Structuring your savings in this way means a portion of your money will be released at regular intervals, instead of locking it all away in one fixed bond where you won’t have access to any of it until the end of the term.
This could also help savers to manage the uncertainty of interest rate changes in the wider savings market. With portions of your savings maturing every few months or years, you have the ability to move this money to higher-paying accounts if interest rates rise. However, if savings rates drop over time, you will still have money locked away in other fixed bonds earning a competitive rate of interest.
If you deposit £1,000 into a six-month bond paying 4.00% AER, you could earn approximately £20 in interest. This would take your total balance to £1,020.
Savers wanting to secure a fixed rate for less than one year typically have a choice of three-month, six-month and nine-month terms, and the best options will ultimately depend on their savings goals 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.
There are a few providers that offer three-month bonds, and these may be suitable for savers who know they will need their money in less than six months, to pay for a holiday, new car or other major purchase, for example. Any savers who are worried about not having access to their money may also prefer to take out a three-month bond as this is a much smaller commitment than locking it away for 12 months or more.
Six-month savings accounts are one of the more common options if you're looking for a term of less than one year. Many different providers offer six-month bonds, often at relatively competitive rates, which may appeal to those who want to put a lump sum of money aside towards a short-term savings goal, such as a wedding or a home improvement project.
If savers are willing to lock away their money for longer, but want access to it within a year, they could consider a nine-month bond. While there may not be as many nine-month bonds to choose from as there are six-month bonds, these accounts could appeal if you want to ensure you receive a guaranteed return for a few more months.
On our chart, you may see that some accounts don’t specify that they are a six-month or nine-month bond, for example. Instead, they may state a specific date that the fixed term ends. This means that the interest rate is guaranteed from the moment you open the account until this date, which may be slightly more or less than six or nine months, for example.
When deciding how long to fix for, it’s important to consider your own financial situation (including how long you can afford to not have access to your money), as well as current interest rates and where they are expected to go over the coming months.
For example, if you think interest rates will increase over the coming months, you might prefer a shorter fixed term as this means you could move your money to a new account to, hopefully, take advantage of higher rates. However, bear in mind that interest rates can change and may not move as predicted.
If you won’t need your savings for one year or more, 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.
If interest rates are expected to fall, locking into an account with a longer fixed term could protect your money from any rate drops for the specified period and allow you to earn a competitive return for longer. However, as mentioned above, interest rate predictions aren’t guaranteed and could change.
See our Moneyfactscompare.co.uk fixed bond chart to compare rates offered by accounts with a fixed term of less than one year, as well as those with terms as long as five years.
Once a fixed bond reaches the end of its term (or ‘matures’), you will typically be able to choose what happens next.
Before the fixed term ends, you can give the provider instructions to withdraw your funds or deposit them back into a fixed bond, for example. Providers will contact you regarding your options prior to a bond maturing, but it’s still worth setting a reminder yourself so you have time to decide what to do.
If you don’t tell the provider what you want to do with your money, they will automatically put your money into a new account. This could be a “maturity” or easy access account that you can withdraw from at any time but, because these will typically pay a very low interest rate, be wary of letting your savings sit here for too long. Alternatively, other providers may automatically reinvest your money into a fixed bond.
Always check the small print for further details on what happens at the end of the term before opening an account. And, when your fixed bond is approaching maturity, look out for any communications from your provider so you don’t unintentionally leave your money earning little interest or find it’s locked away when you wanted to access it.
If you put money in a bond with a fixed term of several months, it’s important to be proactive about reviewing rates and moving your money between accounts. You can’t just deposit your money in one of these accounts and forget about it as the fixed term will end within a few months and, if you fail to do anything, you may find you’re getting a paltry return on your savings. Set a reminder before the fixed term is due to end so you have time to compare rates and decide where to put your money.
Fixed bonds and notice accounts are both types of savings accounts that apply some form of restrictions on withdrawals.
Because these accounts don’t offer immediate, penalty-free access to your funds, they are both potentially higher-paying alternatives to easy access savings accounts. However, this may not always be the case, so it’s worth checking our charts to see what accounts currently offer the top rates.
The table below compares these two types of accounts and highlights their respective pros and cons.
| Pros | Cons | |
| Fixed Bonds |
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| Notice Accounts |
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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 three months, or even six months or more, before gaining access to your cash.
With this in mind, while a notice account permits withdrawals and fixed bonds typically don’t, you may find you’re unable to access your money for the same period.
For example, you could lock away your money for three months in a fixed bond, while a 90-day notice account means you will need to wait approximately the same length of time before receiving any withdrawals.
But, while money in a fixed bond is guaranteed to earn the same rate for the specified period, the interest rate on a notice account could change at any time.
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; 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.
Yes, some providers offer fixed rate bonds with terms of three months.
This is simply a savings account that pays a fixed rate of interest for six months.
Yes, several providers offer 6 month bonds that pay a guaranteed interest rate in exchange for locking away your money for this period of time. See our chart above to compare the best 6 month fixed rate bonds.
Fixed rate bonds with terms of up to one year can be useful if you want to lock in a guaranteed rate of interest but will need to access your money within a year. Because the interest rate on these accounts won’t change, they can be more appealing than variable accounts that may lower the interest rate.
If you know you won’t need to access your savings for more than one year, it may be worth looking at fixed rate bonds with a longer term. See our chart for the best 1 year fixed rate bonds.
Bear in mind that fixed rate bonds of any term length aren’t suitable if you need access to your money.
Because providers can change rates relatively quickly, it’s worth looking at the chart above to find out the best 9 month fixed rate bond currently available. The chart is updated throughout the day to provide you with a list of all the top rates.
If inflation is below the interest rate of your short-term bond, your savings will grow in real terms. However, if inflation is higher than the interest rate paid on your savings account, your money will lose some of its purchasing power because, if prices have risen, it won’t be able to buy as much as it did previously.
This refers to the period of time in which you can make deposits into a fixed rate bond. You may only be able to add money to an account at the point of opening with some providers, but others will offer a longer funding window of 14 days, for example.
The providers offering the best six-month fixed rate bonds can change as they adjust their rates. You may find that the top accounts come from challenger banks and specialist savings providers, not the main high street banks.
It may be easiest to use a savings calculator to work out the interest you could earn over six months. Alternatively, in an account’s product information, providers will usually display an estimated balance based on a certain deposit size and the interest rate of the account.
But, if you want to work out an estimate yourself, you can multiply the interest rate by the amount you want to deposit and divide this by two. For example, the calculation if you have £1,000 to deposit in an account paying 4% interest would be (1,000 x 0.04) / 2 = 20. So you would earn £20 interest over six months.
Yes, you can deposit in as many six-month bonds as you choose. There’s no limit on the number of savings accounts you can have.
It can be a good idea to spread your money between multiple providers if you have a large sum in savings as the Financial Services Compensation Scheme (FSCS) only protects up to £120,000 of your money with each provider. This limit also applies across providers that share a banking licence.
Once a six-month bond ends, you can deposit your savings into a new fixed rate bond. Your savings provider may automatically put your money into a new fixed bond at the end of the term, but other providers may automatically move it into a variable savings account instead.
However, if you don’t like the automatic option, you can choose what happens to your savings once the term ends. Your savings provider should contact you before the end of the term with your options.
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