6 month fixed rate bonds

A 6 month fixed rate bond might be right for you if:

You don’t need to access your savings for six months

You want to know exactly how much you’ll earn at the end of the term

You’d like to protect your savings from any interest rate changes over the next 6 months

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Should you choose a 6 month fixed rate bond?

If you’re looking to save money and take advantage of some of the best interest rates available, opening a fixed rate bond might be right for you. Although you can choose from set terms of up to five years, a 6 month fixed rate bond might be a good choice for you if you don’t want to lock your money away for too long, but you still want to earn a good amount of interest.

Why choose a 6 month fixed rate bond? If you have a lump sum of money that you’re prepared to lock away for six months, you may find that you can get a higher interest rate through a six month fixed rate bond (also known as a fixed term deposit) than you would typically get with an ISA or easy access account.

Key takeaways

Fixed interest: When you open a 6 month fixed rate bond you’ll earn a guaranteed rate of interest for six months
Minimum deposit: Many 6 month fixed rate bonds require a minimum opening deposit of between £500 and £1,000
Short-term goals: A 6 month fixed rate bond may be ideal if you’re looking for a guaranteed return but don’t want to tie your money up for too long
Protection: If your 6 month fixed rate bond is with a UK-regulated bank, your deposit will be protected under the FSCS scheme (up to £85,000 per person, per banking group)

What is a 6 month fixed rate bond?

If you have a lump sum to invest and want a short-term return of less than a year on your savings, a 6 month fixed rate bond could be ideal, especially if you’re waiting for an increase in the base rate of interest.

Fixed rate accounts commonly offer higher interest rates than ISAs or easy access savings accounts, so you’ll also get stability and certainty for the duration of your term.

A 6 month fixed rate bond is a savings account that locks your money at a fixed rate of interest for six months. Opening a 6 month fixed rate savings account means the rate of interest you earn won’t change for six months, regardless of changes to the base interest rate.

To open a 6 month fixed bond, you can make one or more transfers until you have reached the deposit amount you want and then your money is locked for the whole of your term.

Is a 6 month fixed rate bond the same as 6 month fixed rate deposit?

Yes, you’ll hear 6 month fixed rate bonds also called 6 month fixed term deposits, 6 month fixed rate savings, 6 month fixed rate savings bonds and 6 month fixed rate savings accounts.

Can I lock my money in for longer than six months?

Yes – if you want a longer-term option for your savings, you can also apply for fixed rate savings accounts of one year, two year, three year and five year terms. The advantage of longer-term bonds is that they typically offer higher interest rates, and earn you more over the term due to the power of compounding.

Which 6 month savings bond you opt for should depend on your savings goals. Whatever account you choose, you won’t be able to access your deposit until the account matures at the end of six months.

You can apply for any number of fixed rate savings accounts. It’s important to note that if you open more than one account from the same banking group, your total balance across all your accounts contributes towards your deposit protection total.

What are the benefits of a 6 month fixed rate bond?

Opening a 6 month fixed rate bond means you’ll know exactly what you’ll earn from your savings and when your savings will be available. If there’s something you’re saving for in the short-term, but you want to earn interest while you wait, a 6 month fixed rate savings account might be a good option.

If you can deposit a lump sum you won’t be able to touch again for six months, a 6 month fixed rate bond could benefit you because:

Your interest rate is fixed for six months
You’ll know how much interest you’ll earn
It’s easy to plan
Your deposit is protected from changes to the base interest rate

How do 6 month fixed rate savings accounts work?

To open a 6 month fixed rate bond, you must deposit a lump sum which is then locked away to earn interest. When your savings account matures six months later, you can access your savings, but you can’t access your money during the term. You can’t make deposits into your account after your initial deposit, nor can you usually close a fixed rate bond before the term ends.

Like other fixed rate savings accounts, 6 month bonds can only be opened with a minimum and maximum deposit. This opening deposit amount is usually between £500 and £1,000. The maximum deposit amount can be as much as £1,000,000 or £2,000,000, but at Raisin UK the maximum deposit amount is fixed at £85,000 per person, per banking group. This is so you’ll be protected by the relevant deposit protection scheme, such as the FSCS. The amount you can deposit varies between providers, so it’s important to check the details and apply for an account that suits you.

How is interest earned on a 6 month fixed rate bond calculated

The interest you’ll earn is calculated as a yearly percentage, or annual equivalent rate (AER). How much you’ll personally earn is determined by the following:

The duration of your fixed rate, i.e. six months
The amount of your deposit
The interest rate (AER)
How interest is earned according to the bank

Will I be taxed on my savings?

It depends. Basic rate taxpayers can earn up to £1,000 of interest per year and higher-rate (40%) taxpayers can earn up to £500 per year without paying tax. Additional rate (45%) taxpayers pay tax on all of the savings interest they earn. Learn more about how the personal savings allowance works.

How is interest paid on a 6 month fixed rate savings account?

For 6 month fixed rate bonds, like fixed rate bonds of any term, when you earn interest is dependent on your bank. Some banks compound interest and others pay at maturity. You can find out how and when a bank will pay interest by reading the description of each savings account.

What happens after six months?

When your account matures after six months, you can choose from the following options:

Renew your account with the same bank and open a new fixed rate bond using either your original deposit amount or your original deposit amount plus any interest you’ve earned
Withdraw your deposit plus any interest you’ve earned and close the account
Transfer your savings to another account

Are fixed rate bonds safe?

Your deposit will be protected by the Financial Services Compensation Scheme (FSCS) if your savings account is with a regulated UK bank. This covers deposits of up to £85,000 including interest per person, per banking group.

All of the fixed rate savings accounts in our marketplace include deposit protection. If you open a savings account from a UK bank through Raisin UK, your deposit will be protected by the FSCS.

You won’t lose money with fixed rate bonds as the interest rate is guaranteed to the end of your term. At the end of your agreed term, you’ll receive your original deposit back along with any interest you’ve earned. Thanks to the protection provided by the FSCS mentioned above, up to £85,000 of your savings are also protected should your financial institution fail.

Benefits of opening a 6 month fixed rate savings account through Raisin UK

Our range of 6 month fixed rate savings accounts from UK banks are free to open and can be managed and accessed in one place.

Need more flexibility from your savings? Check out our notice accounts.

How to open a savings account at Raisin UK

To open savings accounts from our partner banks, you first need to open a Raisin UK Account, after which you can apply for fixed rate savings accounts in three steps: