Advertisement

Why choose a two year fixed rate bond? 

For savers looking for a medium-term home for their money, a two-year fixed rate bond can offer a reasonable interest rate, without tying up your money for too long. The best rates are usually offered by challenger banks. View today's best rates below or read our guide to two year fixed rate bonds to learn more. 

Advertisement

Best 2 Year Fixed Rate Bond Rates

  • Bank of London and The Middle East Logo
    Bank of London and The Middle East Premier Deposit Account (Anticipated Profit Rate) FSCS logo
    FSCS logo
    AER
    2.35%
    Expected Rate
    Account Type
    Fixed
    Notice / Term
    2 Year Bond
    Interest Paid
    Anniversary
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Not Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 2.35% paid at £1K
    AER 2.35% paid at £1K
    Expected Profit Paid Anniversary
    Interest payment Interest must be paid away
    Min Opening Amount £1,000
    Max Investment £1,000,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a linked or nominated account

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    Linked Product (Non-Funded): Must have or open a BLME transfer account to hold funds pending investment

    Additional Information

    This bank operates under Islamic finance principles, the rates displayed represent the expected profit rate.
  • Bank of London and The Middle East Logo
    Bank of London and The Middle East Premier Deposit Account (Anticipated Profit Rate) FSCS logo
    FSCS logo
    AER
    2.25%
    Expected Rate
    Account Type
    Fixed
    Notice / Term
    18 Month Bond
    Interest Paid
    Anniversary
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Not Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 2.25% paid at £1K
    AER 2.25% paid at £1K
    Expected Profit Paid Anniversary
    Interest payment Interest must be paid away
    Min Opening Amount £1,000
    Max Investment £1,000,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a linked or nominated account

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    Linked Product (Non-Funded): Must have or open a BLME transfer account to hold funds pending investment

    Additional Information

    This bank operates under Islamic finance principles, the rates displayed represent the expected profit rate.
  • Zenith Bank (UK) Ltd Logo
    Zenith Bank (UK) Ltd Raisin UK - 2 Year Fixed Term Deposit FSCS logo
    FSCS logo
    AER
    2.10%
    Account Type
    Fixed
    Notice / Term
    2 Year Bond
    Interest Paid
    Anniversary
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Available By Mail Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 2.10% paid at £1K
    AER 2.10% paid at £1K
    Interest Paid Anniversary
    Interest payment Interest must be compounded
    Min Opening Amount £1,000
    Max Investment £85,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a linked or nominated account

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    Raisin UK is a savings marketplace offering a range of accounts. By clicking through for this product you will be directed to Raisin UK Savings Marketplace, who will administer your application. You will need to set up a Raisin UK account online and accept their terms and conditions before you apply. Raisin UK are offering a bonus of up to £100 when you open a savings account via their website. Terms and conditions apply.
  • Axis Bank UK Ltd Logo
    Axis Bank UK Ltd Fixed Deposit Account FSCS logo
    FSCS logo
    AER
    2.03%
    Account Type
    Fixed
    Notice / Term
    2 Year Bond
    Interest Paid
    Anniversary
    Opening Account
    Available Online Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Not Available Online Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 2.03% paid at £1K
    AER 2.03% paid at £1K
    Interest Paid Anniversary
    Interest payment Interest can be paid away or compounded
    Min Opening Amount £1,000
    Max Investment £200,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a linked or nominated account

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A
  • QIB (UK) Logo
    QIB (UK) Raisin UK - 2 Year Fixed Term Deposit FSCS logo
    FSCS logo
    AER
    2.00%
    Expected Rate
    Account Type
    Fixed
    Notice / Term
    2 Year Bond
    Interest Paid
    On Maturity
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Available By Mail Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 2.00% paid at £1K
    AER 2.00% paid at £1K
    Expected Profit Paid On Maturity
    Interest payment Interest paid on maturity
    Min Opening Amount £1,000
    Max Investment £85,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a linked or nominated account

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    This bank operates under Islamic finance principles, the rates displayed represent the expected profit rate. Raisin UK is a savings marketplace offering a range of accounts. By clicking through for this product you will be directed to Raisin UK Savings Marketplace, who will administer your application. You will need to set up a Raisin UK account online and accept their terms and conditions before you apply. Raisin UK are offering a bonus of up to £100 when you open a savings account via their website. Terms and conditions apply.
  • Paragon Bank Logo
    Paragon Bank 2 Year Fixed Rate Savings Account FSCS logo
    FSCS logo
    AER
    1.95%
    Account Type
    Fixed
    Notice / Term
    2 Year Bond
    Interest Paid
    Anniversary
    Opening Account
    Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 1.95% paid at £1K
    AER 1.95% paid at £1K
    Interest Paid Anniversary
    Interest payment Interest can be paid away or compounded
    Min Opening Amount £1,000
    Max Investment £500,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a variable rate account pending instructions/withdrawal

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A
  • Paragon Bank Logo
    Paragon Bank 2 Year Fixed Rate Savings Account FSCS logo
    FSCS logo
    AER
    1.95%
    Account Type
    Fixed
    Notice / Term
    2 Year Bond
    Interest Paid
    Monthly
    Opening Account
    Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 1.93% paid at £1K
    AER 1.95% paid at £1K
    Interest Paid Monthly
    Interest payment Interest can be paid away or compounded
    Min Opening Amount £1,000
    Max Investment £500,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a variable rate account pending instructions/withdrawal

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A
  • QIB (UK) Logo
    QIB (UK) Raisin UK - 18 Month Fixed Term Deposit FSCS logo
    FSCS logo
    AER
    1.95%
    Expected Rate
    Account Type
    Fixed
    Notice / Term
    18 Month Bond
    Interest Paid
    On Maturity
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Available By Mail Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 1.95% paid at £1K
    AER 1.95% paid at £1K
    Expected Profit Paid On Maturity
    Interest payment Interest paid on maturity
    Min Opening Amount £1,000
    Max Investment £85,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a linked or nominated account

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    This bank operates under Islamic finance principles, the rates displayed represent the expected profit rate. Raisin UK is a savings marketplace offering a range of accounts. By clicking through for this product you will be directed to Raisin UK Savings Marketplace, who will administer your application. You will need to set up a Raisin UK account online and accept their terms and conditions before you apply. Raisin UK are offering a bonus of up to £100 when you open a savings account via their website. Terms and conditions apply.
  • RCI Bank UK Logo
    RCI Bank UK Fixed Term Savings Account FSCS logo
    FSCS logo
    AER
    1.90%
    Account Type
    Fixed
    Notice / Term
    2 Year Bond
    Interest Paid
    Anniversary
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 1.90% paid at £1K
    AER 1.90% paid at £1K
    Interest Paid Anniversary
    Interest payment Interest must be compounded
    Min Opening Amount £1,000
    Max Investment £1,000,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a variable rate account pending instructions/withdrawal

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A
  • RCI Bank UK Logo
    RCI Bank UK Fixed Term Savings Account FSCS logo
    FSCS logo
    AER
    1.90%
    Account Type
    Fixed
    Notice / Term
    2 Year Bond
    Interest Paid
    Monthly
    Opening Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Managing Account
    Available Online Not Available At Branch Not Available By Mail Not Available By Telephone Not Available By Mobile
    Go To Provider's Site
    Rates
    Access
    Information
    Opening Restrictions
    Additional Information

    Rates

    Rate 1.88% paid at £1K
    AER 1.90% paid at £1K
    Interest Paid Monthly
    Interest payment Interest must be compounded
    Min Opening Amount £1,000
    Max Investment £1,000,000
    Introductory bonus N/A

    Access

    Withdrawals Allowed
    Early Access Allowed
    Access Note
    N/A
    Further Additions Allowed
    At the end of the fixed term
    Your provider will write to you before the account matures. If you don’t give them any instructions, the money in the account will be paid into a variable rate account pending instructions/withdrawal

    Information

    Min Age 18
    Max Age 0
    Taxation
    Interest is paid without tax being deducted, but may be taxable depending on your personal circumstances

    Opening Restrictions

    N/A

    Additional Information

    N/A

Select a Savings Category

Note

Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme up to a maximum level of protection of £85,000 per person per institution.

Disclaimer

All rates subject to change without notice. Please check all rates and terms before investing or borrowing.

Quick Links

Quick links are where we have an arrangement with a provider so you can move directly from our site to theirs to view more information and apply for a product. We also use quick links where we have an arrangement with a preferred broker to move you directly to their site. Depending on the arrangement we may receive a modest commission either when you press a 'Go to Provider' or 'Speak to an Adviser' button, when you call an advertised number or when you complete an application.

How Moneyfacts works

  • blue money scales

    BALANCED. Moneyfacts.co.uk is entirely independent and authorised by the Financial Conduct Authority.

  • free label

    FREE. There is no cost to you. Our service is entirely free and you don't need to share any personal data to access our comparison tables.

  • drawing of pound sign and arrow

    TRANSPARENT. We only receive payment from product providers and intermediaries for quick/direct links and adverts through to their websites.

  • blue binoculars

    COMPREHENSIVE. We research the whole market and scour the small print so you can find the best products for your needs.

Get our weekly newsletter

Weekend Moneyfacts is available free by email to all Moneyfacts.co.uk users.

Please send me Weekend Moneyfacts, Savers Friend and selected third-party offers.

A guide to two year fixed rate bonds

Leanne Macardle

Leanne Macardle

Editor

At a glance

  • Two year fixed rate bonds offer a good medium-term savings option.
  • Make sure you can commit your money for the full term.
  • Most two year fixed rate bonds won’t let you access your money early.

What are the advantages of a two year fixed rate bond?

There can be many reasons why you might find a two year fixed rate bond an attractive option. Primarily, these will tend to offer better interest rates than, say a one year fixed rate bond or easy access account. In return for your agreement not to touch the funds you have deposited, the bank or building society can offer you a better rate that is fixed for the duration of the bond. For people who are able to put these funds aside for the duration, they offer a safe and consistent way of earning a decent return. However, it must be stressed that before investing, you are certain you will not need access to these funds – in many instances withdrawals will not be possible and even if they are there will be heavy penalties in terms of loss of any interest you may have already earned. On the other hand, you might feel that you could commit your money for longer and reap an even better return. In that case, you might want to consider a three year fixed rate bond.

Open to even longer terms? three year fixed rate bonds and four year fixed rate bonds are also available, with five year fixed rate bonds offering the possibility of the best rates. 

Things to consider

When thinking about taking out a two-year fixed rate bond, you should also consider what you think will happen to interest rates over this period. If rates go up you could find that your bond is paying less than the top rates available and to make matters worse, it may be expensive or impossible to move your money before the end of the term to capitalise on better returns. If rates go down, or remain broadly the same, you’ll earn more than if you had kept your money in the best-paying easy access account.

What sort of penalties are there for early access?

Simply put, in most instances you will not be able to withdraw the monies you have invested until the bond matures. Where withdrawals in full or in part are allowed, you’ll find that you will be penalised by the loss of a significant amount of interest. In some cases, this can be all the profit you would have made up to the point that the withdrawal is made. Individual bonds will each have different rules on what is permitted, and you are strongly encouraged to take these into account before committing your funds.

Cookies

Moneyfacts.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy