Fixed Rate Bonds are a unique type of
savings account that allow savers to lock their money away for a 6 month to 5 year period without access to their funds, and in return they can benefit from high interest rates that remain fixed throughout the chosen period. Your bonds interest rate is therefore very important, as you will be frozen on it for the duration of the account, so it is important that you shop around to find the best rates, on a term that suits your financial requirements.
With fixed rate bonds, interest is paid monthly, annually, or on maturity of the bond, depending on the account you choose. As the rate is fixed, it is possible to calculate exactly what returns you will get from your investment, giving you a regular predictable income.
There is an element of risk involved in investing in fixed term bonds, as rates can fall – which is good for you, but on the flip-side they can also increase, leaving your interest rate lower than new or variable accounts.
