4 Year Fixed Rate Bonds - 5 Year Bonds | moneyfacts.co.uk

4 Years and Over Fixed Rate Bonds

  - Compare the long term fixed rate bonds as chosen by our experts.
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Compare the Best 4 Year & over Fixed Rate Bonds

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2.75%
7 Year Bond £1000
  1. Yes
  2. No
  3. Yes
  4. No
Details...  

2.75%
26.06.25 £1000
  1. Yes
  2. No
  3. No
  4. No
Details...  

2.70%
5 Year Bond £1000
  1. Yes
  2. No
  3. No
  4. No
Details...
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2.70%
26.06.24 £1000
  1. Yes
  2. No
  3. No
  4. No
Details...  

2.66%
26.06.23 £1000
  1. Yes
  2. No
  3. No
  4. No
Details...  

2.65%
5 Year Bond £2000
  1. Yes
  2. Yes
  3. Yes
  4. No
Details...
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2.60%
5 Year Bond £1000
  1. Yes
  2. No
  3. Yes
  4. No
Details...  

2.60%
5 Year Bond £10000
  1. No
  2. No
  3. Yes
  4. No
Details...  

2.60%
expected rate
7 Year Bond £25000
  1. Yes
  2. No
  3. No
  4. No
Details...
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2.55%
expected rate
5 Year Bond £25000
  1. Yes
  2. No
  3. No
  4. No
Details...
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2.45%
expected rate
4 Year Bond £25000
  1. Yes
  2. No
  3. No
  4. No
Details...
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2.52%
4 Year Bond £1000
  1. Yes
  2. No
  3. No
  4. No
Details...
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2.10%
4 Year Bond £1000
  1. Yes
  2. No
  3. No
  4. No
Details...
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2.25%
5 Year Bond £1000
  1. Yes
  2. No
  3. No
  4. No
Details...
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2.30%
5 Year Bond £500
  1. Yes
  2. No
  3. No
  4. No
Details...
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2.16%
5 Year Bond £1000
  1. Yes
  2. Yes
  3. No
  4. No
Details...
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1.86%
5 Year Bond £500
  1. Yes
  2. No
  3. No
  4. No
Details...
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Moneyfacts.co.uk Best Buys show the best products chosen by our independent experts. Where we have been able to we have also provided a link for you to open an account today. Products shown with a yellow background are sponsored products.

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.
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Long-term fixed rate bonds explained

Longer term bonds tend to offer the best savings rates, but are they worth setting your money aside for four to seven years? Read on to find out more about them.

On this page:

  1. What is a fixed rate bond?
  2. Why choose a longer-term bond?
  3. How is interest added to my bond?
  4. How many savings bonds can I have?
  5. How to compare bonds
  6. How is interest taxed?
  7. Can I open a five-year bond if my credit rating is poor?

What is a fixed rate bond?

Fixed rate bonds are savings accounts that offer a set rate of interest in exchange for a period of limited or no access. If you're happy to commit your savings to such an account for at least a year, you can take advantage of some of the highest interest rates on offer in the savings market.

These accounts are mainly designed for people with a substantial lump sum of money they want to set aside to accumulate interest. As such, they not only offer limited options when it comes to retrieving money from the bond, but tend to restrict additions as well. With sometimes only a week or no time at all to add more funds to the fixed term bond, it's important to be sure of how much you want to set aside from the start.

That said, some bonds will allow access, which can be handy if you think you may need to make a withdrawal from your five-year bond, for example. However, the accounts that allow early access tend to charge substantial interest penalties for the privilege, so think twice before taking advantage.

You can find out whether the fixed rate bond you're interested in allows access and comes with a penalty by clicking on the Details button above. You'll notice that those accounts that do allow access may charge as much as a year's interest, which means that if you think you will need to access the money within the first year, you can end up with less than you've invested.

Aside from a set interest penalty, you may also find accounts that taper the penalty, so that it gets smaller the closer your withdrawal is to the end of the term (for example, loss of 360 days' interest if you make a withdrawal in the first year, loss of 180 days' interest if you make a withdrawal in the second, etc.). This is certainly something to consider before you commit.

Note also that some bonds will require higher deposits than others, so it may be the case that to get the highest rate available you would need to put away several thousands of pounds. Bear in mind that with the Financial Services Compensation Scheme, up to £85,000 is protected per person per building society or banking group, so you needn't worry about funds getting lost should a bank go bust - even with a small provider - unless you plan to put in more than that.

Why choose a longer-term bond?

The longer you can afford to set your savings aside, the higher your interest rate should be. For savers who don't need to access their savings for a longer period of time, four or five-year fixed rate bonds can offer some of the best savings rates available. There might even be seven or 10-year fixed rate bonds in the charts that offer even better rates.

You might want to commit to fixed rate bonds for five years or more if interest rates are currently high and due to go down. However, you will always run the risk of rates going up during the term of the bond.

Think about what interest rates might do over the term of the bond before committing your money, but don't discount the security that knowing how much interest you're accumulating can bring. If you keep putting it off for fear of rising interest rates and don't commit to any bond, you might find your savings languishing in an account with no or low interest and miss out on the best five-year bonds available.

Alternatively, if you think rates might be going up in a few years, you could choose a one, two or three-year fixed rate bond instead, and commit to a longer-term bond at a later date. You would still be able to get a higher rate than what's available on easy access or notice accounts, without the same length of commitment.

If you're looking to put away a large amount and are worried about taxation, you could also have a look at the top fixed rate cash ISAs currently available. And there's nothing stopping you from having multiple accounts; an easy access account and fixed rate bond can both play an important, complementary role in any savers' portfolio.

How is interest added to my bond?

What happens to the interest on your bond will depend on the specific product. Certain products will pay interest yearly on a specific date, while others will pay it on the anniversary of when you made your investment. Over the long term, this doesn't tend to make that much difference.

What can make quite a bit of difference is whether your interest is compounded or paid away. Where a provider insists that your interest must be paid away, this means that it will get added to your nominated bank account once a year. While this can be a good thing if you want to use your savings to get an annual cash boost, you will be missing out on compound interest, i.e. the interest that is calculated on your savings plus the previous years' interest, the snowballing effect of which can quickly add up.

The best (five-year) fixed rate bonds are not likely to offer you the option of paying interest on a monthly basis, although some do - you may just have to look beyond the Best Buys. Simply search for long-term bonds that pay monthly interest using our search tool, and if you get this paid away, you'll secure a monthly income from your savings. For these accounts, you will notice that the Annual Equivalent Rate (AER) differs from the gross rate. Click through to find out what AER is.

How many savings bonds can I have?

You can have as many long-term fixed rate bonds as you like. Unlike with ISAs, there are no restrictions to how many savings accounts you can open in a year, nor how much you can invest in them, though there may be overall investment limits depending on the account. You can also choose to open such a bond as a joint account, which you and your partner or friend can both pay into in preparation for buying a house in a few years' time, for instance.

How to compare bonds

While longer-term bonds should give you higher returns, if you don't find a competitive account you might miss out on the best interest rates. That's why it's so important to compare the best fixed rate bonds of five years or even longer.

Don't just look at the interest rate, however. While it may be easy to pick the account at the top of the charts, don't forget to consider the term. An account with a slightly lower rate might work out better if it also has a shorter term. Don't forget to take the minimum deposit requirement and access restrictions into account, either.

Most bonds will be covered under the UK's Financial Services Compensation Scheme, while non-UK-based providers will offer similar schemes, so you shouldn't worry about how safe your funds are no matter which provider you choose. You'll be able to find how safe your money is by clicking on the account's Details.

How is interest taxed?

Since the personal savings allowance came into force, up to £1,000 in savings interest per year is exempt from taxation. Read more on how savings are taxed here. If you are looking for a savings account that is truly tax-free, consider a fixed rate ISA instead.

Can I open a five-year bond if my credit rating is poor?

As savings bonds do not come with a credit facility, there is no reason for providers to run a credit check. All you need to open a savings account is the required minimum deposit and potentially a nominated current account for transferring the funds. While this means you can easily open a savings account with a poor credit rating, it also means that any savings you have in such accounts won't count positively towards your credit score either.

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