Best Fixed Rate Bonds Up to 1 Year

Up to 1 year fixed rate bonds explained

If you’ve got a lump sum of money you don’t mind losing access to for a short period, a fixed rate bond with a term up to one year could be worth considering. These accounts can offer higher rates of interest than easy access accounts without needing to lock your money away for too long, and because the rate is fixed you’ll know exactly what you’ll earn in interest by the end of the term.

There’s the added benefit that the interest rate won’t change during the term, protecting your money from any potential rate fluctuations. And, if rates rise in that time, you won’t have to wait long to take advantage. Just be prepared for the fact that most accounts won’t let you access your money early, so you’ll need to be able to commit to the full term.

Fixed rate bonds with a term of up to one year can be ideal for those who have short-term savings goals, perhaps if they have a holiday coming up or a big-ticket purchase they want to save for. The bonus of having such a short term is that it requires less of a commitment than some other bond types, so it could be equally suitable for someone who isn’t sure if they’ll need to access their cash, but who still wants to maximise their returns.

Bear in mind that these won’t be suitable for those who want to make regular contributions to the account – most fixed term bonds require a lump sum at the outset, after which you won’t normally be able to make any additional deposits. Yet for those comfortable with the restrictions, they could offer the perfect short-term home for your money.

These bonds tend to be offered by challenger banks, with few – if any – offered by more well-known high street names. But don’t let that put you off. Provided the bank is covered by the Financial Services Compensation Scheme (FSCS) you’ve got the same protection as with mainstream banks, and often at higher rates, too.