Fixed Rate Bonds
Fixed Rate Savings Accounts – also known as Fixed Rate Bonds, are a type of savings account that rewards savers for locking their money away through high rates that remain fixed for the duration of the term.
Fixing your rate means that the interest rate paid on your balance will not be affected by changes to the bank rate. This is great if rates begin to fall, as you will be earning above the odds, but rates could rise, locking you in at a low rate.
Fixed rate savings accounts provide a guaranteed, predictable income, with a number of terms available, generally ranging from around 6 months up to 5 years in some cases.
It is recommended that you look into the level of protection offered by your provider. The Financial Services Compensation Scheme has been set up to protect UK bank accounts, providing cover of up to £50,000 per individual per institution. It is possible to spread your cash out between different institutions, thus increasing your protection.
It is important to be aware of which banks fall under the same institution, because if you were to hold an account with a £50,000 balance, you may not qualify for further compensation with another bank, for example, Halifax and Bank of Scotland have a single registration to the scheme, so customers banking with both must be careful not to exceed their £50,000 limit between the banks. For more information, check out Which4U's Top Ten Savings Tips.
Fixing your rate means that the interest rate paid on your balance will not be affected by changes to the bank rate. This is great if rates begin to fall, as you will be earning above the odds, but rates could rise, locking you in at a low rate.
Fixed rate savings accounts provide a guaranteed, predictable income, with a number of terms available, generally ranging from around 6 months up to 5 years in some cases.
It is recommended that you look into the level of protection offered by your provider. The Financial Services Compensation Scheme has been set up to protect UK bank accounts, providing cover of up to £50,000 per individual per institution. It is possible to spread your cash out between different institutions, thus increasing your protection.
It is important to be aware of which banks fall under the same institution, because if you were to hold an account with a £50,000 balance, you may not qualify for further compensation with another bank, for example, Halifax and Bank of Scotland have a single registration to the scheme, so customers banking with both must be careful not to exceed their £50,000 limit between the banks. For more information, check out Which4U's Top Ten Savings Tips.
