Fixed rate bonds allow you to earn higher interest than other savings options, such as instant access accounts, in exchange for locking up your savings for a longer period of time. The majority of banks offer a number of fixed rate bonds ranging from 1 year, 2 years, 3 years or 5 years. It should be noted that longer fixed rate bonds offer the highest interest.
Fixed rate bonds for over 65s
In January 2015, the government launched a type of fixed rate bond aimed at those over 65. The bond was created to encourage more people to put money aside for their retirement. T
Initially, you could deposit between £500 and £10,000 on each bond. There was no cooling off period. This meant that as soon as you deposited your money, you were unable to withdraw any of your savings from the bond without a 90 days’ interest penalty.
If you are over 65 and looking for a fixed rate bond, you will no longer be able to get this special government released bond and you should review the fixed rate bonds on the market.
Fixed rate bonds available
There are other fixed rate bonds available and the market leading bonds can be found in the table above.
It should be noted that if you deposit your savings into a fixed rate bond, you will not be able to make a withdrawal until the end of the term. Some banks do offer the option to withdraw from the bond early, but this will usually require written notice and will result in a potentially large penalty.
