Fixed rate accounts are not influenced by the Bank of England base rate and will stay the same for the duration of your investment. You can not add to your savings once the investment has started and there will be a large fee for making a withdrawal. They usually have a higher rate of interest than easy access accounts due to this ‘inconvenience’.
If you are happy to lock your money away for the duration of the investment, then fixed rate accounts are ideal due to the high rate of interest.
Top 1 Year Fixed Interest Rate Savings Accounts:
ICICI HiSave Fixed Rate Account
Interest rate (AER): 3.75%
Interest Paid: On Maturity
Min. Investment: £1000
Access: Online
Bradford and Bingley 1 year eBond
Interest rate (AER): 3.75%
Interest Paid: On Maturity
Min. Investment: £1000
Access: Online
Interest Rate (AER): 3.33% (tax free)
Min. Investment: £1
Withdrawals: Allowed, but charged 180 days of interest
Access: Telephone or Post
Other Lengths
The AA Internet 16 Month Fixed Rate Savings Account
Interest rate (AER): 4.01%
Length: 16 Months
Interest Paid: On anniversary and on maturity
Min. Investment: £500
Access: Online
ICICI HiSave Fixed Rate Account
Interest rate (AER): 4.35%
Length: 2 years
Interest Paid: Annually
Min. Investment: £1000
Access: Online
Foreign Banks
An increasing number of foreign banks are entering the UK market with high interest. FirstSave and ICICI are regulated by the Financial Services Authority meaning that the first £35, 000 of any investment is guaranteed if anything should happen to the bank and your money.
Not all foreign banks are regulated by Financial Services, so if anything was to happen to the bank, there is a risk that you could lose all of your savings.
