Fixed bonds allow savers to deposit a one off lump-sum of money into an account for a fixed term with a fixed rate. These accounts are desirable because they can be used to protect savers from falling interest rates, keeping them on a frozen rate until the bond matures.
If rates fall after you have opened the account, fixed rate bonds can be a great way to enjoy better returns than any other savings products on offer. As with most things, there is also a flip-side to this advantage, as savers could find that rates begin to increase during the term, which would result in a rate lower than that on offer from new and variable rate accounts being paid on balances.
Fixed bonds provide savers with a guaranteed predictable income that can be paid monthly, annually, or when the bond matures. You can open as many fixed term bonds as you wish, but it is important to ensure all of your savings are protected, by understanding the details shown on out Top Ten
Savings Tips.
