Fixed rate bonds offer the opportunity to receive rates higher interest in exchange for tying up your savings for a prolonged period of time. Most banks offer a range of fixed rate bonds, usually from 1 year, 2 years, 3 years or 5 years. It should be noted that longer fixed rate bonds offer the highest interest.
The government introduced a bespoke type of fixed rate bond in January 2015, which was specifically designed for those over 65. This special fixed rate bond, often referred to as the pensioner bond, was provided as an attempt to encourage more people to save money for their retirement. T
The pensioner bond had a minimum deposit of £500 and a maximum deposit of £10,000. The bond was rigid with its terms and conditions, as there was no cooling off period at the beginning of the bond. Unlike other fixed rate bonds, where you are sometimes offered a short period of time at the beginning of the fixed term to change your deposit, with the pensioner bond the decision to deposit your money was final. If you wanted to withdraw any savings from the fixed rate bond within the fixed term, you incurred a penalty equal to 90 days’ of interest.
No more pensioner fixed rate bonds
The pensioner fixed rate bond is no longer available. Therefore, if you receive a pension and you wish to put some money aside in a fixed rate bond then you should consider the other bonds on the market.
Fixed rate bonds available
A summary of the best fixed rate bonds are found in the table above. However, it is important to bear in mind that if you deposit your savings into a fixed rate bond, you will not be able to make a withdrawal until maturity. Although there are some banks that allow early withdrawals, they will usually need written notice and they will often charge a potentially large penalty.
