Are there any alternatives to 1 year fixed rate bonds?
Good alternatives to one year fixed rate bonds will differ from person to person and your own individual savings goals. However, if you’re looking for the same low-risk factor and a guaranteed return on your savings, you might want to consider notice accounts or easy access accounts.
Can I lose money on a 1 year fixed rate bond?
Providing your financial institution is protected by the FSCS, up to £85,000 of your money is protected in the event of their failure. Fixed rate bonds also provide little to no risk in the sense that you will always get your money, and a little bit extra, back when they mature.
Do I pay tax on 1 year fixed rate bonds?
The interest earned on one year fixed rate bonds will be taxable but only when it exceeds your personal savings allowance. For basic rate taxpayers, this amount is £1,000, while higher rate taxpayers have an allowance of £500.
Can I add more money into a 1 year fixed rate bond?
The majority of one year fixed rate bonds only allow you to deposit money when you open your account. For accounts that you can top up, you might want to consider other types of savings accounts that allow you to pay money into regularly.
Can I withdraw money early from a 1 year fixed rate bond?
You may be able to find a fixed rate bond that will allow you to withdraw money early, but this isn’t typical and you will usually be charged a fee.
How do I pay money into my 1 year fixed rate bond?
You will pay money into your one year fixed rate bond when you open it, in the form of a deposit. Most fixed rate bond accounts don’t allow you to add any more money, meaning a notice account or ISA might be a better option for you.
How many 1 year fixed rate bonds can I open?
There’s no limit to how many fixed rate bonds you can open, but it’s important to keep your personal savings allowance in mind, because you’ll need to declare any amount that goes over it. For investment purposes, it might also be better for you to open fixed rate bonds of different terms, as we explored in the table above.
Are 1 year fixed rate bonds protected by the FSCS?
Yes. Most financial institutions are part of the FSCS, but you can check that your institution offers the protection by searching for them on the FCA Register.
