A three year fixed rate bond might be for you if you want to earn a top savings rate and are prepared to forego access to your money for the three year term. The best rates are usually offered by challenger banks. View today's best rates below or read our guide to three year fixed rate bonds to learn more.
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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.
DisclaimerAll rates subject to change without notice. Please check all rates and terms before investing or borrowing.
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A guide to what challenger banks are and their rise in popularity.
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The two most important things to consider when taking out a three year fixed rate bond are interest rates and how likely it is that you’ll need access to those funds invested within the three-year period.
Firstly, the interest rate you sign up to will be fixed for the duration of the bond. Therefore, if rates skyrocket during those three years, you might find yourself earning an interest rate that suddenly seems quite poor. On the other hand, if interest rates fall, you’ll have made a great investment earning a return that is much better than the majority of easy access accounts. Three year fixed rate bonds are considered a good trade-off between the security of a fixed rate product without locking your money away for the long-term.
When taking out a fixed rate bond, you are usually not supposed to withdraw your cash for a specified period of time – in this instance, it will be for three years. Most three-year fixed rate bonds do not allow you access to your money once it’s been deposited until the bond matures. Where early withdrawals are allowed, a considerable interest penalty will almost certainly have to be paid.
If not being able to access your money over a three year period could be a challenge, you may want to consider a two year fixed rate bond or a one year fixed rate bond as an alternative.
Many of the best rates available on three-year fixed rate bonds are offered by what is often referred to as ‘challenger banks’. These are normally, smaller, relatively unknown banks who are new to the market. However, they are just as safe as any of the high street, big-name banks and building societies. All the providers appearing on Moneyfacts.co.uk are part of the Financial Services Compensation Scheme (or an EU equivalent). Therefore, you can be safe in the knowledge that the first £85,000 you have saved is protected if the bank or building society were to go bust.
