Before selecting a fixed rate bond use our tips below;

  1. Review different saving account options – Look at instant access to fixed rate bonds to cash isa products – All have advantages and disadvantages.
  2. The market changes constantly – shopping around to find the right savings deal for you. Interest rates are at an all-time low, so now more than ever you need to be proactive in getting the best rate for your money and then reviewing on a regular basis.
  3. Find a fixed rate bond that works for you – The choice of bond is dependent on the amount of money you intend to deposit, the rate and the length of the term. Whether you want to operate on an online account basis, postal, branch or telephone basis. Read the savings provider terms and conditions carefully.
  4. Read the small print – What are the access terms if there are any, what notice is required, are there any penalties for withdrawing funds, can you make additional deposits during the term, what happens to the money on maturity.
  5. Some fixed rate bond deals require you to have the interest paid into a current account – This may mean you have to open a current account with that provider – good to check the small print.
  6. Check the small print on how savings interest is paid – Whether the interest is paid monthly, quarterly or annually, it will be need to be declared if you submit a tax return. If interest is paid on maturity this may be useful for tax planning purposes.
  7. Sounds obvious but if you opt for an online account you will need to have internet access –  Some bond accounts are offered on a postal, telephone or branch basis – check the detail.
  8. Check that your money is covered by the Financial Services Compensation Scheme – They will guarantee £85,000 of savings against institutional failure. Most UK banks should have this cover, but Irish or European banks that do not have a UK arm may not be covered by the FSCS.
  9. Maturity process – Bond providers will write to you when your fixed rate bond is due to mature. Typically, on application the provider may ask for details of your current account for proceeds to be paid into. Alternatively, monies may be paid into a holding account operated by the provider and this will probably pay no interest. It is therefore important to diarise the maturity of your bond and have in mind what you plan to do with the money.
  10. Tax position – If you are not a UK tax payer many savings bond providers will pay interest gross on submission of the relevant HMRC tax form.