But what are the drawbacks of a fixed rate account?
The main drawback is that your money’s stuck in time. Think of a fixed rate savings account as a time capsule, destined never to see the light of any other interest rate for as long as it’s locked in. On the one hand, you’re enjoying consistency but on the other you run the risk of missing out on higher rates that might be available if the base rate does increase
Also, what happens if you really need that cash? The whole point of a fixed rate account is that you can’t access it. There may be some very exceptional cases where your bank or building society may let you. But there could be hefty penalties which could end up being more than the interest you made.
Anything else I should consider?
Think about your needs and what’s best; fixed rate savings accounts offer you security and a guaranteed level of interest which is usually paid monthly or annually depending on the account. But if you don’t want to commit to locking your savings away then you might need to consider an alternative.
Your idea of what makes a top fixed rate savings account might be quite different from someone else’s, so it’s worth comparing the market to see just what’s out there. You might be surprised to find one that meets your expectations.