Best 18 Month Fixed Rate Bonds

An 18-month fixed rate bond is an account that asks you to lock away a lump sum of money for 18 months in return for a fixed rate of interest. You normally won’t be able to add or withdraw funds during the term, and after the bond matures you’ll get your capital back plus any interest earned.

The biggest advantage of an 18-month bond is that, because the rate is fixed, you’ll know exactly how much interest you’ll earn over the term. You’ll be protected from rate changes too, which can be particularly important during times of volatility in the market.

The rate is guaranteed and so won’t change during the 18 months, but if rates rise in that time you’ll be able to benefit relatively quickly. Plus, you may be able to earn more interest than with a one-year bond yet will only have to lock your money away for a few additional months, offering the ideal compromise.

Most 18-month bonds won’t let you access your money before the end of the term, and among those that do, you’ll likely face a hefty interest penalty, which could override anything that you’d earned.

The fact that the rate is guaranteed can also be its downfall, as if rates go up over the period, you may be earning less interest than you’d otherwise be able to. Yet the security that an 18-month bond provides can often outweigh that risk, particularly given that such accounts will nearly always offer considerably higher rates than an easy access deal.

The best 18-month bonds are typically offered by challenger banks, with few high street brands active in this sector of the market. Yet this also means that the interest available will normally be higher, but also that you might be expected to operate the account online or via app.

Use our comparison tool to find the best 18-month fixed rate bonds available.

A trend in the one-year fixed rate bond market is for the best rates to be offered by smaller, less mainstream banks. These are referred to as challenger banks, however, you should not any have any concerns that your money is any less safe with one of these institutions than with one of the bigger, high street brands. All banks and building societies listed by Moneyfactscompare.co.uk are part of the Financial Services Compensation Scheme. As such, the first £85,000 you have saved is fully protected should the bank or building society fail.

Ready to compare today's bond rates? Click below to view the best 18 month fixed rate bonds at the top of the page.