09.02.2023 | 2 minutes estimated reading time | Print this article

Should I save with a fixed rate bond or an ISA?

We all want to know that our money is working as hard as possible. But with interest rates on ISAs now typically being lower than other equivalent-term savings accounts, and with restrictions on how much you can save per year, you may be wondering if there are alternative options when it comes to making the most of your savings – especially if you have a large lump sum, or know that you’d like to save more than £20,000 over the course of the year.

Could you earn more from your savings?

Choosing between a fixed rate bond and an ISA will depend on a number of factors, including your savings goals, personal circumstances and what length of time you would be happy to put your money away for, but you could consider a fixed rate bond if you know you want to save more than £20,000 per year, or you’re looking for alternative savings accounts that also offer competitive interest rates.

At Raisin UK you can also open as many savings accounts as you like, and deposit up to £85,000 per savings account, while the maximum you can save across all your ISAs combined is £20,000 per tax year.

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How do ISAs compare to fixed rate bonds?

Here’s how a fixed rate bond on the Raisin UK marketplace compares to the top equivalent-term fixed cash ISA*. When comparing savings accounts you might be wondering whether small variations in interest rates really matter. Can a difference of less than 1% have a significant impact on your bank balance? The answer is yes!

  Top fixed rate cash ISA      Top fixed rate bond at Raisin UK
1 year             4.25% AER      5.65% AER
2 year             4.16% AER      4.40% AER
3 year             4.20% AER      5.00% AER
5 year             4.20% AER      4.81% AER


Looking to boost your savings? Register with Raisin UK today

While we don’t currently offer ISAs, you can quickly and easily open fixed rate bonds, plus other savings account types, by registering for a Raisin UK Account. It’s simple to set up your account and completely free to use.

Register today

*We compared the market-leading rate on fixed rate bonds available at Raisin UK with the market-leading rate on fixed rate cash ISAs, as found on https://moneyfacts.co.uk/isa/ on 09/03/23.