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Short term fixed rate bonds may suit you if you have a lump sum to save and won’t require access to your money for a period of up to 14 months (although the majority of products in our Best Buy table are 1Year Fixed Rate Bonds).
In return for depositing your hard earned cash in fixed-rate bonds for a set period of time, you will get a fixed interest rate that, in general, will be a higher rate than those on offer with easy access accounts or no-notice savings accounts.
Important! Be aware that the majority of fixed-rate bonds have terms and conditions that impose restrictions relating to withdrawing your funds early, so this type of account will not be suitable if you think you might need to make a withdrawal during the bond's term.
When taking out a fixed-rate bond, you are making an agreement with the bank or building society that you won't withdraw your cash for a specified period of time. Therefore, you won't usually be allowed access to your money during the fixed term. There are a few bonds that allow you to make one withdrawal, however you could lose interest on your savings as a penalty, so make sure you read the details.
The minimum deposit on a fixed-rate bond is usually quite high, typically between £500 and £1,000, but can be much higher.
Opting for a fixed rate can give you a greater sense of saving security, however the risk with a longer term fixed rate is that if rates increase, you could end up stuck with a lower rate deal.
Moneyfacts.co.uk can help you find the best rate for your savings. Our team of independent experts compare hundreds of bonds daily to make sure you get the best rate available.