A fixed rate savings account guarantees a set return with a specific interest rate for a set period, typically ranging from one to five years. These accounts typically offer higher interest rates than easy-access accounts, making them attractive for individuals willing to invest their funds for a specified timeframe. While these accounts offer consistent growth without being impacted by market changes, withdrawing funds early may result in penalties. Therefore, they are most suitable for individuals looking for dependable and secure returns on their savings.
Top fixed rate savings
accounts
Top rate
5.05%
Paragon Bank
Two withdrawals per year. Interest rate reduces to 1.5% from the third withdrawal.
Best 1 year fixed savings accounts
| Bank | Interest Rate (AER) | Minimum Deposit | Maximum Deposit | FSCS Protection | Signup Link |
|---|---|---|---|---|---|
| Habib Bank Zurich | 5.21% | £5,000 | £1,000,000 | £85,000 | Open Account |
| Al Rayan Bank | 5.2% | £5,000 | £1,000,000 | £85,000 | Open Account |
| Tandem Bank | 5.12% | £1 | £2,500,000 | £85,000 | Open Account |
| SmartSave Bank | 5.11% | £10,000 | £85,000 | £85,000 | Open Account |
| Charter Savings Bank | 5.09% | £5,000 | £1,000,000 | £85,000 | Open Account |
| Stream Bank | 5.05% | £1,000 | £100,000 | £85,000 | Open Account |
| Zenith Bank | 5.05% | £1,000 | £2,000,000 | £85,000 | Open Account |
| Atom Bank | 5.05% | £50 | £100,000 | £85,000 | Open Account |
| Hodge Bank | 5.05% | £1,000 | £1,000,000 | £85,000 | Open Account |
Last Updated: 12th May 2024
FSCS Protection
Easy access accounts typically offer FSCS protection, which means that your savings are safeguarded up to £85,000 per person, per banking institution, in the event that the bank fails. This protection provides peace of mind to savers, ensuring that their money is secure and accessible whenever needed. It’s important to note that the FSCS protection applies to most UK-regulated banks and building societies, helping to protect individuals’ savings in the unfortunate event of a financial institution’s insolvency.
Top fixed rate savings questions
What is a fixed rate savings account?
Fixed-rate savings accounts provide a guaranteed return on your savings by offering a set interest rate for a specific duration, typically ranging from one to five years.
How does a fixed rate savings account differ from an easy-access savings account?
With fixed rate savings accounts, you’ll need to commit your funds for a set period to earn higher interest rates, in contrast to easy-access accounts that allow you to withdraw anytime with lower interest rates.
What are the penalties for early withdrawal?
Many fixed rate savings accounts come with penalties for withdrawing funds early, such as loss of interest or extra charges. The specific penalty varies based on the conditions established by the financial organisation.
Can I add more money to my fixed rate savings account after opening it?
Usually, once a fixed rate savings account is opened, additional contributions cannot be made. The amount of the initial deposit remains fixed for the entire duration of the term, so it is important to carefully decide on the initial savings amount.
Are fixed rate savings accounts protected by the Financial Services Compensation Scheme (FSCS)?
UK-regulated banks and building societies provide fixed rate savings accounts that are safeguarded by the FSCS. This protection extends to cover deposits of up to £85,000 per individual, per institution.