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. In restaurant: 2 for 1 on selected food, cheapest free. This means that the interest earned isn’t protected against tax. Log into the Internet Bank (This link will open in a new window) to see your current interest rate, or visit our support pages where you can find all our interest rates and other useful information. By agreeing a fixed-term period, you’re essentially locking it away for that time. Energy and Digital products are not regulated by the FCA. They come with terms and conditions, however. These are the key advantages of fixed rate savings accounts: And the main drawbacks of fixed rate savings accounts: The most common terms for both fixed rate savings accounts and fixed rate bonds are one to five years. Find a savings account: The Which? Fixed rate bonds also tend to offer better interest rates than instant access savings accounts. We use cookies to allow us and selected partners to improve your experience and our advertising. 5 years. Money Compare content is hosted by Which? Apple and the Apple logo are trademarks of Apple Inc., registered in the U.S. and other countries and regions. In order to get that level of interest, you have to keep your money in the account and not touch it for that fixed period. If you’re looking for the best fixed rates, these are usually reserved for the accounts and bonds with the longest fixed terms. However, your Personal Savings Allowance will allow you to earn a specific amount in interest, tax free. Rates correct as at 8 January 2021. Learn more about how interest is paid. All rights reserved. Fixed Rate Savings. ^For the period 1st September to 30th November 2020, 12,477 people responded to the recommend question. If you would like to know more about cookies and how to manage them please view our privacy & cookie policy. Pre-existing medical conditions travel insurance, How to claim vouchers on broadband packages. Pick the balance that’s right for you. Consider the term length very carefully, before agreeing to tie your money up for years. However, this isn’t the case 100% of the time, so don’t just assume this when looking for deals. These are the companies that combine competitive deals with excellent customer service, and have been awarded Which? However, your Personal Savings Allowance will allow you to earn a specific amount in interest, tax free. It makes no difference to how the savings accounts appear in our tables, meaning you’ll always be able to stay in control and find the best deals for you, not us. Usually, if you’re willing to leave your money for a longer term, you’ll get a higher rate of interest on your fixed term savings. For 2020/21, this is £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. The main drawback is that you won’t have easy access to your money – but if that’s okay with you, read more here and find a fixed rate savings account that suits you. For 2020/21, this is £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Which? *To obtain a reward a qualifying purchase must be made. For example Lloyds, Halifax and Bank of Scotland count as one institution, as do HSBC and First Direct, whereas RBS and NatWest count as two. If you already know the account you want, then let's get started. You may get a higher rate of interest than with other accounts available when you open the account and you won't lose out if interest rates fall. Financial Services Limited. That said, fixed rate savings often offer the best returns in a low interest rate … A fixed rate bond is a type of savings account that locks your money in at a fixed rate of interest for a specified amount of time, typically one year, two years, three years, five years or six months. This means that the interest earned isn’t protected against tax. Unoccupied property insurance for landlords. You can understand more and change your cookies preferences here. Once your fixed term ends, it’s time to cash in your savings. Everything you need to know about ‘Your documents’, Lifetime ISAs if you’re saving for retirement or your first home. You can expect to get the best ISA rates … During this period, you won’t be able to access your money. You won’t need to do much management until the end of the term. You’ll just need to fill out a form to close the account and then wait for the money to be transferred. The rate of interest you get doesn’t change for the period of the bond. A savings account is basically just a place to put cash in to earn interest and save for the future. A proportion of this commission is then repaid to Which? Some fixed rate accounts will also specify a minimum or maximum deposit – so if you want a place to store a large amount of money, you need to be aware of that. 0.35%. They’re aimed at people who are able to lock their savings away without needing quick access to their money. Sun-Thurs. So, you’ll normally get a higher rate for agreeing to lock your money away for five years than you would for two. Looking for a fixed rate savings account? The term you choose will typically depend on your savings goals. The Which? Interest rate changes: interest rates are currently at historic lows (in June 2020, the bank of England base rate is just 0.10%), so the return on a long (four or five year) fixed rate bond may become uncompetitive during the term. 0.60%. Terms are most commonly available between one and five years, but some providers may offer even longer terms. A fixed rate bond can be the right choice if you want to avoid risk and uncertainty over your interest rate. Fixed rate bonds can earn you interest at the same rate for 1, 2, 3 or 5 or more years. Group of which we are part. Financial Services Limited. With all this in mind, a great place to start is by comparing fixed-rate accounts and bonds through Compare the Market. Though if you put more than £85,000 in a single bank or building society, then any money over the limit won’t be protected by the Financial Services Compensation Scheme (FSCS) or its equivalent for some EU-registered banks if the bank or building society goes bust. Limited is registered in England and Wales to 2 Marylebone Road, London NW1 4DF, company number 00677665, and is an Introducer Appointed Representative of Which? When you deposit your money in a fixed rate bond, it’s locked away; you typically can’t add to it or access it. 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. Fixed rate bonds. Or if you can access it, there will be a hefty fee for doing so. Fixed-rate ISAs are a type of tax-free savings account that you open for a specific period, with an interest rate that depends on the length of your term. All the information you need to choose the savings account for you . If you later decide that you need to access it, you’ll be breaking the agreed term on the account, which will mean you’ll need to pay a penalty fee. What is public liability insurance and do I need it? They work exactly the same, allowing you to lock your money away for a fixed period at an agreed interest rate. Please check availability and terms direct with the relevant product provider. Another factor is account management, if you have a particular preference for online or in-branch access – though this is less important with fixed term savings than it is with instant access accounts. Lock your savings away for a set period and know exactly how much you'll earn in interest at the end. A fixed rate bond (or fixed term savings account) is a simple investment product that pays out a guaranteed amount of interest after a set period. These are commonly referred to as short-term fixed rate bonds. A 1 year fixed rate bond is a savings account that guarantees your interest rate for a year, though at the cost of not being able to access your money for that period, or having to pay a fee to do so. Check carefully for these limits before going any further. 1 membership per 12 months. The FSCS has advised that its financial protection will remain for customers living in the UK who have money in UK-authorised companies, now the Brexit transition period has ended. Children's Savings. Financial Services Limited is a wholly-owned subsidiary of Which? 2021 comparethemarket.com. Check if you should overpay it before saving. Subject to the risks noted above, if such an account is paying more than an easy-access option it may be a way to get more benefit from your tax-free savings. 11,706 responded with a score of 6 or above, therefore 93.8% are likely to recommend. Key product information How it works You choose a deposit term for your Fixed Rate Saver - either 1 or 2 years. If you choose to save using a foreign-owned bank, you should make sure you understand how your money is kept safe. These rates are subject to change and may be withdrawn at any time. Rate definitions. A fixed-rate savings account or bond isn’t the same as a fixed-rate ISA. For more information on the rules for FSCS protection that are now in place, visit the Financial Services Compensation Scheme website. Fixed rate bonds are just another name for fixed rate savings accounts. If you agree to lock your money away for a longer term, you’ll usually be rewarded with a higher annual equivalent rate (AER), which is the amount you can earn if your money is left in the account for a full year. Fixed-rate bonds are savings accounts that usually pay a set rate of interest, agreed at the beginning, for a certain period of time. At the end of the term, your Fixed Term Savings Account will automatically be closed and your money will be transferred to a Metro Bank Current Account or nominated savings account. Your account provider were to go under, you get doesn ’ t the same as a fixed-rate savings rewards... Editorial team and reflects the quality of service Which your documents ’, Lifetime ISAs you... Customer score is based on research carried out by the Which Services team on 03301 220.! Earn in interest, tax free in restaurant: 2 for 1 on food... Interest and save for the money to be directly deposited into another account, or you could lose out monthly... 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