Best 1-year fixed-rate bonds

All you need to know about 1-year fixed bonds. Compare accounts with interest rates up to 5.17% AER.

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Is my money safe?

The Financial Services Compensation Scheme (FSCS) guarantees that it will step in to compensate the first £85,000 (£170,000 for a joint account) you have saved with a UK-authorised bank, building society or credit union in the event that the business goes bust.

Compare 1-year fixed-rate bonds

Table: sorted by interest rate, promoted deals first
1 - 15 of 157
£
Name Product Interest rate Invest Deposit protection Open via Incentive Apply link Return
QIB (UK) – Raisin UK - 1 Year Fixed Term Deposit
QIB (UK) – Raisin UK - 1 Year Fixed Term Deposit
5.02% AER fixed for 1 year
£1,000 - £85,000
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£12,602.40
at maturity
Paragon Bank – Raisin UK - 1 Year Fixed Term Deposit
4.9% AER fixed for 1 year
£1,000 - £85,000
FSCS logo
protected
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£12,588
at maturity
Brown Shipley – Raisin UK - 1 Year Fixed Term Deposit
Brown Shipley – Raisin UK - 1 Year Fixed Term Deposit
4.9% AER fixed for 1 year
£1,000 - £85,000
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protected
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£12,588
at maturity
National Bank of Egypt (UK) Limited – Raisin UK - 1 Year Fixed Term Deposit
National Bank of Egypt (UK) Limited – Raisin UK - 1 Year Fixed Term Deposit
4.85% AER fixed for 1 year
£10,000 - £85,000
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£12,582
at maturity
Punjab National Bank (International) Limited – Raisin UK - 1 Year Fixed Term Deposit
Punjab National Bank (International) Limited – Raisin UK - 1 Year Fixed Term Deposit
4.8% AER fixed for 1 year
£1,000 - £85,000
FSCS logo
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£12,576
at maturity
LHV Bank – Raisin UK - 1 Year Fixed Term Deposit
LHV Bank – Raisin UK - 1 Year Fixed Term Deposit
4.8% AER fixed for 1 year
£1,000 - £85,000
FSCS logo
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£12,576
at maturity
Aldermore – 1 Year Fixed Rate Savings Account
4.65% AER fixed for 1 year
£1,000 - £1,000,000
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£12,558
at maturity
Aldermore – 1 Year Fixed Rate Savings Account
4.65% AER fixed for 1 year
£1,000 - £1,000,000
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£12,558
at maturity
RCI Bank UK – Fixed Term Savings Account
4.6% AER fixed for 1 year
£1,000 - £1,000,000
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£12,552
at maturity
RCI Bank UK – Fixed Term Savings Account
4.6% AER fixed for 1 year
£1,000 - £1,000,000
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£12,552
at maturity
Isbank – Raisin UK - 1 Year Fixed Term Deposit
Isbank – Raisin UK - 1 Year Fixed Term Deposit
4.5% AER fixed for 1 year
£1,000 - £85,000
FSCS logo
protected
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£12,540
at maturity
Ziraat Bank – Raisin UK - 1 Year Fixed Term Deposit
Ziraat Bank – Raisin UK - 1 Year Fixed Term Deposit
4.5% AER fixed for 1 year
£1,000 - £85,000
FSCS logo
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£12,540
at maturity
Allica Bank – 12-Month Fixed Term Savings Account (Issue 60)
Allica Bank – 12-Month Fixed Term Savings Account (Issue 60)
5.17% AER fixed for 1 year
£10,000 - £250,000
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£12,620.40
at maturity
SmartSave – 1 Year Fixed Rate Saver
SmartSave – 1 Year Fixed Rate Saver
5.17% AER fixed for 1 year
£10,000 - £85,000
FSCS logo
protected
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£12,620.40
at maturity
Close Brothers Savings – 1 Year Fixed Rate Bond
Close Brothers Savings – 1 Year Fixed Rate Bond
5.16% AER fixed for 1 year
£10,000 - £2,000,000
FSCS logo
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Please note: This calculator provides estimations based on assumptions such as that you do not make withdrawals. You should always refer to the account provider for exact figures as they may vary from our results. Interest may be taxable.

If you’ve got a lump sum to save and are looking to get a better interest rate than you might get with an easy access savings account, fixed-rate bonds are worth considering – but only if you’re sure you won’t need to touch the money for a while. If that sounds like you, then as well as finding the best rates going, you’ll want to know the options and features to consider before you make your choice. So we’ve covered these here.

What are 1-year fixed-rate bonds?

A fixed-rate bond is a type of savings account. When you deposit your money in a fixed-rate bond, it’s locked away; you typically can’t add to it or access it. Or if you can access it, there will be a penalty for doing so.

In return for the certainty of having your money for all that time, banks usually offer a better rate of interest than on their easy access savings accounts (where you can take out the money any time). What’s more, the rate of interest you get doesn’t change for the period of the bond as it can with an easy access account.

There are fixed-rate bonds for longer periods than one year – two, three, four and five years or more – and a few for just six or nine months.

Bonds with a 1-year term will generally pay a better rate than 9-month (or shorter) terms but a worse rate than 18-month (or longer) terms.

However, at the moment, you can actually get a better rate (5.25% vs 5.17%) on a 6-month term. If you suspect that interest rates are likely to start to come down, then you may still prefer to "lock in" for 1 years, even if it's at a lower rate.

Bonds can be a good way to ring-fence a chunk of money for a special event that’s a year or more away. But if you think you might need access to the money sooner, then there are other options.

These days, some current accounts can pay interest that rivals savings accounts, so before you head straight to a bond, see whether there are other types of account that offer more, including those that don’t tie up your money. The advantage of a bond over a current account is that many current accounts cap the amount of money that they’ll pay decent interest on. So if you have more than a few thousand pounds, and can lock away the money, it’s worth considering a bond.

What types of bonds can you choose for 1 year?

Bonds have different features and eligibility criteria. Here are some key differences.

  • Minimum deposit. The minimum deposit for a 1-year fixed-rate bond can vary from £50 up to £25,000 or more.
  • Existing vs new customers. Banks offer certain bonds to existing current or savings account customers only. However, there are plenty available from providers offering bonds to new customers, and the transfer is typically to and from a “nominated” current account.
  • Online only. Some bonds are web only – you must apply online and operate them online. Other bonds can be opened online but you have the option of managing them via an app.
  • Initial top-up payments. Some bonds allow you to top-up your deposit within the first few weeks; with others, you open with one lump sum and then can’t add any more.
  • Interest payments. Interest can be paid monthly or on the anniversary of the bond.

How to choose the best fixed-rate bonds for one year

  1. First, be sure you won’t need to access the money for the period in question (a year, in this case). If you have any doubt, it’s best to go for a shorter time period, or look at alternatives such as an easy access savings account or ISA or a current account that pays interest.
  2. Compare deals for your deposit amount. Some accounts have a minimum deposit of several thousand pounds, but others allow far lower amounts. Don’t assume a higher minimum deposit always gets you a higher interest rate, though this is often the case.
  3. Check for the rate, when interest is paid, and, if you need this, whether you have the flexibility to make additional top-ups in the first few weeks.
  4. Look out for incentives – some providers, such as Raisin, have been known to offer decent sweeteners to attract your custom.
  5. Interest will be paid tax-free, usually on the anniversary when the bond matures. Remember that if you’re a basic-rate taxpayer, you can earn up to £1,000 in interest each year tax-free. For higher-rate taxpayers, the figure is £500. Interest from money deposited into an ISA up to the annual limit is tax-free.

How much money do you need to open a 1-year fixed bond?

The typical minimum deposit for a bond is £1,000, although there are a few bonds with a minimum of £500 or less. The maximum deposit can go into millions.

Banks typically ask you to pay the minimum deposit within 30 days of opening the account – and will close the account if you don’t. Some accounts allow you to make the minimum deposit and top it up in the first few weeks.

Is your money safe in a 1-year fixed-rate bond?

If you deposit money in a bank (meaning it has a banking licence) that’s regulated by the UK’s Financial Conduct Authority, your savings will be covered to the tune of £85,000 if the bank goes bust under the Financial Services Compensation Scheme. For a joint account, it’s double that figure, so £170,000. There are a few banks which rely on a “passport” to operate in the UK and are regulated in their home country. If those went bust, you’d be relying on regulatory arrangements in the bank’s own country.

Many people don’t realise that the £85,000 is per institution, so if you have accounts in two banks that are in the same group – say, RBS and NatWest – then the total cover is just £85,000 across both accounts.

Additionally, 1 year isn’t long enough to reliably expect a return from, say, stocks and shares investments, so a fixed-rate bond trumps shares for safety in this relatively short term.

What happens at the end of the year?

Hooray – you can access your money again! The bond has now “matured” and the provider will typically pay you the interest at this point. You can now choose whether to have your money paid into your current account, or renew with the same provider by choosing another deal that it’s offering, which may have a different rate.

Is a 1-year fixed-rate bond right for me?

This will depend on lots of factors, such as what you plan to use the money for, when you’re likely to need it, and whether you have other savings.

It’s a good idea to have some money in an easy access account in case of an emergency. Once you’ve got some savings tucked away in an easy access account, a fixed-rate bond could be worth considering if you’re sure you won’t need access to it during the year.

Fixed-rate bonds can be a great option if you want to earn interest on a lump sum that you plan to use for a specific savings goal later down the line.

Fixed-rate bonds are particularly handy when interest rates are high because they let you lock in a decent savings rate for longer”

Katherine Denham, award-winning personal finance expert

Which are the best 1-year fixed-rate bonds at the moment?

Our best fixed-rate bonds are the highest interest rates available. To get the latest rates, we use Moneyfacts data, which covers nearly the full market of savings products and is checked and updated daily. We don’t include accounts from private banks.

All the fixed-rate bonds in our list have savings protection – for most, this is the Financial Services Compensation Scheme (FSCS). Other schemes include that of NS&I, which is 100% backed by HM Treasury, and the Gibraltar Deposit Guarantee Scheme.

  • SmartSave – 1 Year Fixed Rate Saver - 5.17%
  • Allica Bank – 12-Month Fixed Term Savings Account (Issue 60) - 5.17%
  • Close Brothers Savings – 1 Year Fixed Rate Bond - 5.16%
  • Atom Bank – 1 Year Fixed Saver - 5.15%
  • Zenith Bank (UK) Ltd – 1 Year Fixed Term Deposit - 5.1%

An overview of our 1-year fixed-rate bonds comparison

Rates up to 5.17% AER
Number of accounts 157
Minimum investment £1
Maximum investment £9,000,000
Opening options Branch, website, mobile app, post, telephone

Pros and cons of 1-year fixed-rate bonds

Pros

  • Rates are typically higher than on easy access savings accounts
  • Reassurance of knowing the rate can’t drop
  • Many providers covered by Financial Services Compensation Scheme
  • Ideal if you have a lump sum to invest

Cons

  • Can’t touch your money for a year
  • If rates go up during the fixed period, yours won’t
  • You usually can’t make additional contributions during the course of the bond

Bottom line

A 1-year fixed-rate bond can make sense if you have a lump sum that you want to earn interest on without locking your money away for too long. Perhaps if you’re saving for a house deposit and you know that you won’t be ready to buy a home for at least a year.

If you haven’t used your tax-free cash ISA allowance, consider fixed-rate cash ISAs (and if your lump sum exceeds the ISA allowance, consider splitting it across 2 accounts).

Frequently asked questions

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.

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8 Responses

    Default Gravatar
    CliveJune 7, 2023

    Is smart save a legitimate company

    Default Gravatar
    johnMarch 29, 2023

    what is the BEST 1 year fixed rate bond available. As of now !!

      AvatarFinder
      KateMarch 31, 2023Finder

      Hi John,

      Our table on our 1 year fixed rate bond will be able to tell you the best fixed rate bond available as of today.

      Thanks,

      Kate

    Default Gravatar
    JohnJanuary 24, 2023

    Why do you not show or recommend any of First save banks Bonds that are on offer.

      AvatarFinder
      KateJanuary 25, 2023Finder

      Hi John,

      Applications for FirstSave Fixed Rate Bonds are no longer available, which is why we don’t show them on our table.

      Thanks,
      Kate

    Default Gravatar
    edwardDecember 7, 2022

    which is the best rate for me to invest £120,000

      AvatarFinder
      LizDecember 7, 2022Finder

      Hi. You can sort our comparison table by the interest rate to see which account in the table offers the highest rate. It’s important to be aware that with these bonds, you’re locking up your money for a year, and if you deposit more than £85,000, anything over that amount won’t be covered by the FSCS.

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