Fixed rate bonds

Fixed rate bonds up to 2.10% AER at Raisin UK

• Fixed rate bonds usually offer the most competitive rates of all account types
• You’ll have peace of mind that the rate won’t change throughout your term
• Perfect for long-term saving goals on our no-fees marketplace

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Fixed rate bonds explained

A fixed rate bond savings account (also known as a fixed rate savings account, fixed term bond, fixed bond or fixed term deposit) could be ideal for you if you want to lock your money away for a set time at a rate that won’t change from the day you open your account until the end of your fixed term. Fixed rate bonds are a particularly good option to consider in times of uncertainty and falling interest rates. 

As well as providing a risk-free way to grow your savings, fixed term savings accounts usually offer more competitive interest rates than you’ll get from savings accounts that allow you to dip in and out, such as ISAs and easy access accounts.

What is a fixed rate bond?

A fixed rate bond is a type of savings account that pays the same interest rate over a specified term and is ideal if you want to earn a guaranteed interest rate for a set term.

A fixed rate bond 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. The term you choose will typically depend on your savings goals. Whichever term you choose, a fixed term deposit is a secure way to take advantage of competitive interest rates without putting your savings at risk.

The rate of interest you’ll earn usually differs depending on the length of your term, with longer terms commonly featuring higher rates of interest. For example, the highest six month fixed rate bond interest rate in our marketplace is 0.65% AER, while the highest five year fixed rate bond interest rate is 2.10% AER.

November fixed rate bonds update: what’s new?

News of the first green savings bond from NS&I has made quite a splash on the financial world. This is the government’s own savings brand. Rather than excitement, the green bond was received with disappointment, as it has been revealed that the three year fixed rate bond will earn 0.65% in interest. The green bond was pushed by Rishi Sunak in the spring budget with the hope that it would raise billions for green initiatives like renewable energy, cleaning up pollution and helping protect natural resources. But the low rates of interest are sure to be a sticking point for many savers. 

When you compare it with other fixed rate bonds across the market, the government’s interest rates fall far below the line. For example, Raisin UK offers fixed rate bonds up to 1.80% AER – and you get a welcome bonus of £50 if you deposit more than £10,000, helping you kick-start your savings. 

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Fixed rate bond terms

How do fixed rate bonds work?

You open a fixed rate bond by depositing an amount of money that you set when you apply. Once you’ve transferred the amount you want to open your account with and your application is approved, all you need to do is sit back and watch your savings grow. You can’t make deposits into a fixed rate bond after your initial deposit, nor is it usually possible to close a fixed rate bond before it matures.

Fixed rate bonds have minimum and maximum deposit amounts, usually between £500 and £1,000 for a minimum deposit and as much as £2,000,000 for a maximum deposit. At Raisin UK we want to keep your savings safe, so the maximum amount you can deposit is £85,000 per person, per banking group, so that the FSCS or applicable deposit protection scheme protects your money.  Please remember that you are only covered up to £85,000, per banking group, including any direct funds you may already hold with a bank that is also featured on the Raisin UK marketplace.

The FSCS is the United Kingdom’s statutory deposit guarantee scheme that covers deposits in individual savings accounts up to £85,000, per banking group. It is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority. FSCS protection is available on deposits with most UK high-street and online banks and means if the bank fails, and deposits become unavailable, the scheme may cover your savings account deposit up to the £85,000 per person, per banking group limit, including any direct funds you may hold with the bank already.

What are the benefits of fixed rate bonds?

A fixed rate bond could be the right choice for you if you want the reassurance that your savings are safe, you want to know exactly how much interest you’ll earn, and you won’t need to withdraw your deposit before your fixed term elapses.

Are fixed rate bonds a good investment?

Fixed rate bonds might be a great investment if you’re looking to deposit your money into a savings account, as they typically offer better interest rates than easy access or notice accounts. With fixed rate bonds you need to lock in your money until the end of your fixed term, so you should only open one if you have a lump sum that you won’t need to access in the medium to long term.

Can you lose money on fixed rate bonds?

No, you can’t lose money on fixed rate bonds. After the fixed term, you’ll receive your original deposit and any interest you’ve earned

The Financial Services Compensation Scheme (FSCS) protects deposits up to £85,000 per person, per UK regulated banking group under British banking regulations, meaning that your money is safe. 

Why a fixed rate bond from our marketplace might be right for you

  • They’re are free to open
  • Your savings are protected
  • You’ll earn a fixed, competitive interest rate
  • Higher interest rates are available on accounts with longer terms
  • You’ll lock away your savings for a fixed term
  • You can easily manage your savings online
  • The FSCS protects your money up to £85,000 per person, per UK regulated banking group

How is the interest you'll earn on a fixed rate bond calculated?

The interest you’ll earn from a fixed rate bond is advertised as an annual equivalent rate (AER), which makes it easier to compare savings account rates from accounts with different terms. 

How much you earn from a fixed rate bond depends on the following:

  1. The term of your fixed rate account
  2. The amount you deposit
  3. How interest is earned according to the bank
  4. The interest rate (AER)

If you’re a UK taxpayer, you can earn interest on savings up to certain amounts without paying tax on that interest. Basic rate taxpayers can earn up to £1,000 of interest per year, and higher-rate (40%) taxpayers up to £500 of interest per year.

Applying for a fixed rate bond

If you want to quickly and easily apply for fixed rate bonds with attractive rates from a range of UK partner banks, register for a Raisin UK Account and log in to apply today.

You can find out how to apply by reading our guide to opening a fixed rate bond.

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