Browse Fixed Rate Bonds

Best 5 Year Fixed Rate Bond Rates

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Note

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 5 year fixed rate bonds

At a glance

  • Long-term fixed rate bonds offer the very best bond rates.
  • Make sure you won’t need access to your funds for the full term.
  • A significant interest penalty is likely to be charged if early access to funds is allowed.
  • Think carefully about what might happen to interest rates in the future.

Five year fixed rate bonds explained

Falling into the category of long-term investments, A five year fixed rate bond is an excellent way to garner some of the best interest rates available on the market. In exchange for not touching the money deposit for the set period, the bank or building society will pay a preferential rate – often well beyond the kind of returns you can find for easy access accounts or fixed rate bonds with shorter terms

Pros and cons of five year fixed rate bonds

A definite plus point of five year fixed rate bonds is the very favourable interest rates available for many long-term savings products. In exchange for your commitment not to touch your cash for such a long period, banks and building societies are keen to offer attractive rates, and competition in this area means that you can find a great offer by using our comparison tables.

In addition, many accounts of this length offer a variation paying interest on a monthly, rather than yearly basis. This can be an excellent benefit if you are investing a significant sum and plan to live on the income or just use it to supplement your monthly revenue.

On the other hand, the biggest disadvantage of this kind of long-term investment is the fact that five years is a considerable time to lock away your cash. If you are considering a five year fixed rate bond, then it pays to think carefully about the reality of whether or not you can afford to be without these funds for such a long period. Even if you are allowed to have early access – and most accounts will not – then you will likely face a significant loss of interest.

Who offers the best return on a five year fixed rate bond?

Many of the best rates available in the five year fixed rate bond marketplace are offered by smaller, relatively unknown banks who are new to the market – often referred to as challenger banks. Your money is just as safe in these institutions as it is in any high street bank. All banks and building societies we list are part of the Financial Services Compensation Scheme (or an EU equivalent). Consequently, you can feel assured that the first £85,000 you have saved is protected if the bank or building society were to collapse.

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