Generally speaking, the longer you’re happy to tie up your money for, the better the interest rate you’ll receive. But this is not always the case; sometimes the best 1 year fixed rate bond beats the best 5 year fixed rate bond.
You will also need to work out how long you can realistically afford to leave your money untouched.
You can choose to put your money in a fixed rate bond for:
- 6 months
- 1 year
- 18 months
- 2 years
- 3 years
- 5 years
Longer-term bonds may also be available, but be sure you can afford to go without the money for that length of time.
Can I withdraw money early from a fixed-rate savings bond
In some cases, you may be able to access your funds before the end of the bond term – but you’ll usually pay a hefty penalty fee for doing so, which could wipe out any gains you made from interest payments. You’ll need to check with your bank or building society to see what their conditions are.