Browse Fixed Rate Bond Terms

Best 1 Year Fixed Rate Bonds

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Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme up to a maximum level of protection of £85,000 per person per institution.

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All rates subject to change without notice. Please check all rates and terms before investing or borrowing.

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A guide to one year fixed rate bonds

At a glance

  • One year fixed rate bonds are a great short-term savings option as rates tend to be higher than on notice and easy access accounts.
  • Most one year fixed rate bonds do not let you access your money early.
  • The best rates usually offered by challenger banks.
  • All banks and building societies we list are covered by the Financial Services Compensation Scheme (or European equivalent).

Why should I choose a one year fixed rate bond?

Essentially a one year fixed bond is likely to offer you a better rate of interest than a simple easy access account. In return for your agreement not to touch the funds for the fixed period of 12 months, the provider can offer you a superior return than those where funds can be withdrawn at will. In most cases, you’ll find that one-year fixed rate bonds will not allow any withdrawals – although you may find one or two that allow you access with an interest penalty. Hence these accounts are perfect for investors who can happily put the funds to one side for the duration of the bond.

A one year fixed rate bond is what’s known as a short-term bond. These offer better returns but do not lock your money away for an extended period. Consequently, they are a useful trade-off between access and obtaining a decent return on your investment.

Who are one year bonds most suitable for?

One year fixed rate bonds are ideal for anyone considering a short-term investment (i.e. anything up to 12 months). A year is a relatively short time to lock your money away, but due to the restrictions on withdrawals, you must be certain that you will not need access to these funds during the one-year duration you have agreed to. If you feel confident about committing to a longer period, you might consider a two year fixed rate bond instead.

Open to even longer terms? Three, four and five year fixed rate bond terms are also available.

Don’t recognise a fixed rate bond provider?

A trend in the one-year fixed rate bond market is for the best rates to be offered by smaller, less mainstream banks. These are referred to as challenger banks, however, you should not any have any concerns that your money is any less safe with one of these institutions than with one of the bigger, high street brands. All banks and building societies listed by Moneyfacts.co.uk are part of the Financial Services Compensation Scheme (or an EU equivalent). As such, the first £85,0000 you have saved is fully protected should the bank or building society fail.

Ready to compare today's bond rates? Click below to view the best one year fixed rate bonds at the top of the page.

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