Fixed-rate savings accounts

Put your feet up while your savings grow

Protect your interest rate

Earn the same rate for the full term, even if the base rate falls

Understand your tax-free allowance

Earn tax-free interest up to your Personal Savings Allowance

Prepare for what’s ahead

Predictable earnings mean easier financial planning

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What is a fixed-rate bond?

A fixed-rate bond is a type of savings account that offers a set amount of interest on your money over a set length of time – known as the ‘term’.

By locking your money away for a set term, you could benefit from a guaranteed interest rate and potentially higher returns.

Your provider can’t change the interest rate during the term. In exchange, you won’t be able to touch your money. If early access to your funds is allowed, it will likely come with a penalty charge.

How do fixed-rate bonds work?

Choose your term length

A term is the length of time you lock an interest rate in for – similar to a contract.

One- and five-year fixed-rate bonds are some of the most common terms available. However, some providers may offer even longer terms, so there should be plenty of options to suit your savings goal.

Choose your deposit amount

Most fixed-rate bonds only allow you to make one lump sum deposit when you open the account. You can’t usually top it up later on.

Wait for your bond to mature

Once the bond term comes to an end, you can withdraw your money plus the interest it’s earned. If you need to withdraw your money before the agreed term ends, you’ll usually pay a penalty fee.

What are the term lengths on fixed-rate savings accounts?

Term lengths typically range between one and five years. However, some providers offer fixed-rate savings accounts and bonds for up to 10 years – or even longer.

What term should I choose?

Knowing which term length to go for can be confusing. A good way to approach it is to consider what you're saving for and when you'll need the money for it.

For example, if you're saving for a wedding, you could go for a two-year term. Or if you're saving for a deposit on a house, a five-year term could be more suitable.

Another thing to consider is how long you can go without needing to access the money in your fixed-rate account.

Sometimes, longer terms can offer higher interest rates. But if there’s a chance you’ll need your funds sooner, it might be best to go for a short-term fixed-rate bond.

Will I have access to my money?

A fixed-rate bond will restrict access to your money. By agreeing to a term, you’re essentially locking money away for that time.

This allows the provider to plan how it uses your deposit, which is why fixed-rate accounts can sometimes offer higher interest rates. If you find that you need to withdraw your savings during your term, you’ll be breaking the account agreement and you'll likely need to pay a penalty fee.

If you’ve earned little interest before deciding to withdraw, the penalty charge and inflation could mean you leave the account with less than you started with.

Check the terms of the account carefully before opening one, so you’re fully aware of the rules and charges.

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What are the pros and cons of fixed rate savings accounts?

Pros

Potentially higher interest rates

Fixed-rate accounts can sometimes offer higher interest rates than easy-access savings

Guaranteed returns

Locking in a rate means your earnings are guaranteed, making fixed-rate accounts less risky than investing or accounts with variable rates

Easy financial planning

You’ll know exactly how much your money will grow by the end of your term, which can be handy if you want to save a certain amount or for a specific event.

Cons

You can’t access your money

If you need to take your savings out before the end of the fixed term, there could be a hefty penalty to pay

You could miss out on higher rates

You won’t benefit from higher interest rates if the base rate on savings accounts rises while you're locked into a term

Limited deposits

You usually need to pay in a lump sum and lock it away. Most accounts won’t let you top up your savings after that.

Why choose fixed-rate savings bonds?

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What are the alternatives to fixed-rate bonds?

If you’re not sure whether fixed-rate bonds are the right savings option for you, there are alternatives you could explore. These include:
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Easy-access savings accounts

Pay in and withdraw your money whenever you want. Remember to double-check the rates, as they could be lower than fixed-rate accounts.

Easy-access accounts
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Regular savings accounts

Handy for saving small amounts regularly. Rates can be some of the highest around, but deposits and withdrawals tend to be limited.

Regular savings accounts
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Lifetime ISAs

Designed for people under 40 to help them save for a first home or retirement. Save up to £4k a year and get a 25% government top-up (max. £1k per year).

Lifetime ISAs
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Notice accounts

A cross between an easy-access and fixed-rate savings account. You’ll need to give the bank advance notice before taking money out.

Notice accounts

Will I be taxed on fixed-rate savings accounts?

A fixed-rate savings account or bond isn’t the same as a fixed-rate ISA. This means that the interest earned isn’t protected against tax.

However, your Personal Savings Allowance (PSA) will allow you to earn a specific amount in interest, tax-free. This is currently £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate taxpayers don’t have a PSA.

How to find the best fixed-rate bonds

Everyone's circumstances are different, but there are a few key things to consider before choosing an account.
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Interest rate

This shows you how much your savings will grow, so it’s a crucial detail to check. Rates can vary across accounts and providers. If you’re willing to lock your money away for longer, you could find higher interest rates.

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Term length

Remember, you won’t be able to take your money out during the fixed term without penalties. So it’s important to choose a term length you’re comfortable with.

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Deposit requirements

Fixed-rate bonds typically have a minimum and maximum limit you can deposit. Check carefully, as limits can vary between providers.

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Interest payments

Most fixed-rate bonds let you choose whether your interest is paid monthly or yearly. If you want to get your returns at a specific time, this is something worth thinking about when comparing.

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Penalty fees

Check the terms and conditions for any penalty fees you may have to pay if you withdraw your money early. These can be pretty hefty.

More on savings accounts

Find out how to manage your savings and choose an account that suit your needs

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Fixed-rate cash ISAs
See if you can earn more interest by locking up your cash
Account types
Notice savings accounts
Notice accounts offer a middle-ground between fixed and easy-access options
ISAs
Lifetime ISAs
Save for your first home or later life with a government boost
ISAs
Help to Buy ISAs
Find out how to use your bonus if you have an existing HTB Isa
See our savings account guides

FAQs

Will my money be safe?

As long as your account provider is regulated by the Financial Conduct Authority (FCA), your eligible deposits are protected for up to £120,000, per person, per bank, by the Financial Services Compensation Scheme. If your account provider were to go under, you’d receive compensation for up to this amount.

If you’re looking to invest more than this amount in savings accounts, we’d recommend spreading your savings across multiple account providers, to protect your money as best as possible.

What is meant by cashing in savings bonds?

Once your fixed term ends, it’s time to cash in your savings. You’ll normally get a letter or email to tell you when the term is about to ‘mature’, which is just another way of saying it’s coming to an end.

When this happens, you’ll have two options:

  • Cashing in – this is withdrawing the full amount and closing the account

  • Reinvesting – this could be reinvesting the full amount, the full amount plus some extra, or withdrawing some and reinvesting the rest. Your account provider will likely encourage you to reinvest in some form.

How to cash in fixed-rate bonds

If you decide to cash in and withdraw your savings bonds after your fixed term ends, the process is quite simple. You’ll just need to fill out a form to close the account and then wait for the money to be transferred.

You can either ask for the money to be directly deposited into another account, or have it sent to you as a cheque. You should receive your money in about a week, but a direct bank transfer will normally be quicker than waiting for a cheque to arrive.

Where can I put my money instead of a bank?

In recent years, peer-to-peer (P2P) investing has grown in popularity. By cutting out the middleman, P2P platforms can often offer more favourable interest rates than traditional savings accounts.

However, P2P investing can be risky. Your savings won’t be covered by the FSCS guarantee, so if your provider goes bust, you could lose the lot.

If you want a lower-risk option and the security of FSCS protection, a fixed-rate bond could be a good choice.

Sajni Shah
Reviewed 31 Jul 2026 by Sajni Shah Personal finance expert

Sajni is passionate about finding money products to help you make great financial decisions. She keeps track of the latest trends and evolving markets to find new ways to help you save money.

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1 Based on Trustpilot ratings (July 2026).