Best 2 year fixed rate bonds

Discover all you need to know about 2 year fixed rate bonds and compare accounts with interest rates up to 5.07% AER.

FSCS logo
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 2 year fixed rate bonds

Table: sorted by interest rate, promoted deals first
1 - 27 of 121
£
Name Product Interest rate Invest Deposit protection Open via Incentive Apply link Return
RCI Bank UK – Fixed Term Savings Account
4.9% AER fixed for 2 years
£1,000 - £1,000,000
FSCS logo
protected
Open via: website
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View details
£5,502
at maturity
RCI Bank UK – Fixed Term Savings Account
4.9% AER fixed for 2 years
£1,000 - £1,000,000
FSCS logo
protected
Open via: website
Go to site
View details
£5,502
at maturity
Al Rayan Bank – Raisin UK - 2 Year Fixed Term Deposit
Al Rayan Bank – Raisin UK - 2 Year Fixed Term Deposit
4.75% AER fixed for 2 years
£5,000 - £85,000
FSCS logo
protected
Open via: website, mobile app
Go to site
View details
£5,486.28
at maturity
UBL UK – Raisin UK - 2 Year Fixed Term Deposit
UBL UK – Raisin UK - 2 Year Fixed Term Deposit
4.68% AER fixed for 2 years
£2,000 - £85,000
FSCS logo
protected
Open via: website, mobile app
Go to site
View details
£5,478.95
at maturity
Isbank – Raisin UK - 2 Year Fixed Term Deposit
Isbank – Raisin UK - 2 Year Fixed Term Deposit
4.5% AER fixed for 2 years
£1,000 - £85,000
FSCS logo
protected
Open via: website, mobile app
Go to site
View details
£5,460.12
at maturity
National Bank of Egypt (UK) Limited – Raisin UK - 2 Year Fixed Term Deposit
National Bank of Egypt (UK) Limited – Raisin UK - 2 Year Fixed Term Deposit
4.4% AER fixed for 2 years
£10,000 - £85,000
FSCS logo
protected
Open via: website, mobile app
Go to site
View details
N/A
QIB (UK) – Raisin UK - 2 Year Fixed Term Deposit
QIB (UK) – Raisin UK - 2 Year Fixed Term Deposit
4.1% AER fixed for 2 years
£1,000 - £85,000
FSCS logo
protected
Open via: website, mobile app
Go to site
View details
£5,418.40
at maturity
Ziraat Bank – Raisin UK - 2 Year Fixed Term Deposit
Ziraat Bank – Raisin UK - 2 Year Fixed Term Deposit
4% AER fixed for 2 years
£1,000 - £85,000
FSCS logo
protected
Open via: website, mobile app
Go to site
View details
£5,408
at maturity
DF Capital – 2 Year Fixed Rate Deposit (Issue 14)
DF Capital – 2 Year Fixed Rate Deposit (Issue 14)
5.07% AER fixed for 2 years
£1,000 - £250,000
FSCS logo
protected
Open via: website
Go to site
View details
£5,519.85
at maturity
Close Brothers Savings – 2 Year Fixed Rate Bond
Close Brothers Savings – 2 Year Fixed Rate Bond
5.05% AER fixed for 2 years
£10,000 - £2,000,000
FSCS logo
protected
Open via: website
Go to site
View details
N/A
Union Bank of India (UK) Ltd – Fixed Rate Deposit
Union Bank of India (UK) Ltd – Fixed Rate Deposit
4.95% AER fixed for 2 years
£1,000 - £1,000,000
FSCS logo
protected
Open via: branch, post
Go to site
View details
N/A
Union Bank of India (UK) Ltd – Fixed Rate Deposit
Union Bank of India (UK) Ltd – Fixed Rate Deposit
4.95% AER fixed for 2 years
£1,000 - £1,000,000
FSCS logo
protected
Open via: branch, post
Go to site
View details
£5,507.25
at maturity
Union Bank of India (UK) Ltd – Union Premier Bond
Union Bank of India (UK) Ltd – Union Premier Bond
4.95% AER fixed for 2 years
£5,000 - £340,000
FSCS logo
protected
Open via: website
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View details
£5,507.25
at maturity
Hodge Bank – 2 Year Fixed Rate Bond
4.9% AER fixed for 2 years
£1,000 - £1,000,000
FSCS logo
protected
Open via: website
Go to site
View details
£5,502
at maturity
Zenith Bank (UK) Ltd – 2 Year Fixed Term Deposit
Zenith Bank (UK) Ltd – 2 Year Fixed Term Deposit
4.9% AER fixed for 2 years
£1,000 - £2,000,000
FSCS logo
protected
Open via: website
Go to site
View details
N/A
Sensible Savings – Fixed Rate Bond
Sensible Savings – Fixed Rate Bond
4.9% AER fixed for 2 years
£5,000 - £500,000
FSCS logo
protected
Open via: website, post
Go to site
View details
£5,502
at maturity
Hodge Bank – 2 Year Fixed Rate Bond
4.9% AER fixed for 2 years
£1,000 - £1,000,000
FSCS logo
protected
Open via: website
Go to site
View details
£5,502
at maturity
Atom Bank – 2 Year Fixed Saver
4.85% AER fixed for 2 years
£50 - £100,000
FSCS logo
protected
Open via: mobile app
Go to site
View details
£5,496.76
at maturity
Atom Bank – 2 Year Fixed Saver
4.85% AER fixed for 2 years
£50 - £100,000
FSCS logo
protected
Open via: mobile app
Go to site
View details
£5,496.76
at maturity
State Bank of India – Fixed Term Deposit
Additional account needed
State Bank of India – Fixed Term Deposit
4.8% AER fixed for 2 years
£50,000 - £5,000,000
FSCS logo
protected
Open via: branch, website, mobile app, post
Go to site
View details
N/A
State Bank of India – Fixed Term Deposit
Additional account needed
State Bank of India – Fixed Term Deposit
4.8% AER fixed for 2 years
£50,000 - £5,000,000
FSCS logo
protected
Open via: branch, website, mobile app, post
Go to site
View details
N/A
United Trust Bank – UTB 2 Year Bond
United Trust Bank – UTB 2 Year Bond
4.8% AER fixed for 2 years
£5,000 - £1,000,000
FSCS logo
protected
Open via: website
Go to site
View details
£5,491.52
at maturity
State Bank of India – Fixed Term Deposit
Additional account needed
State Bank of India – Fixed Term Deposit
4.8% AER fixed for 2 years
£10,000 - £5,000,000
FSCS logo
protected
Open via: branch, website, mobile app, post
Go to site
View details
N/A
SmartSave – 2 Year Fixed Rate Saver
SmartSave – 2 Year Fixed Rate Saver
4.76% AER fixed for 2 years
£10,000 - £85,000
FSCS logo
protected
Open via: website
Go to site
View details
N/A
Zopa – 2 Year Fixed Term Savings
4.76% AER fixed for 2 years
£1,000 - £250,000
FSCS logo
protected
Open via: website
Go to site
View details
£5,487.33
at maturity
Ford Money – Fixed Saver 2 Year
4.75% AER fixed for 2 years
£500 - £2,000,000
FSCS logo
protected
Open via: website
Go to site
View details
£5,486.28
at maturity
Al Rayan Bank – 24 Month Fixed Term Deposit
Al Rayan Bank – 24 Month Fixed Term Deposit
4.75% AER fixed for 2 years
£5,000 - £1,000,000
FSCS logo
protected
Open via: website, mobile app, telephone
Go to site
View details
£5,486.28
at maturity
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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.

A 2 year fixed rate bond will lock in your money at a set interest rate for 2 years. Here’s what you need to consider, including the pros and cons and how to compare and choose the best one for you.

What are 2 year fixed rate bonds?

Fixed rate bonds involve depositing a set amount of money for an agreed period of time at a fixed interest rate. With 2 year fixed rate bonds, the money is locked in for a period of 2 years, although there are other fixed terms available, which usually range from 1 to 5 years.

With a 2 year fixed rate bond, normally you won’t be able to add money to the savings pot or withdraw it for the duration of that 2 years. The interest rate you get is fixed from the start, which provides certainty on your level of return (although that’s not so great if interest rates go up elsewhere in the meantime).

There is usually a chunky minimum deposit required, so a 2 year fixed rate bond could be a good option if you have a lump sum available that you know you won’t need to get your hands on again in the immediate future.

Bonds with a 2-year term will generally pay a better rate than 18-month (or shorter) terms but a worse rate than 3-year (or longer) terms.

However, at the moment, you can actually get a better rate (5.21% vs 5.07%) 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 2 years, even if it's at a lower rate.

What are the available types of 2 year fixed rate bonds?

These are two main types of fixed rate bonds:

  • Normal fixed rate bonds provide a fixed interest rate for the duration of the bond (in this case, 2 years).
  • Tracker rate bonds involve fixing the interest rate at an agreed level above the Bank of England base rate. So for example, these might offer a rate of 1% higher than the base rate until the end of the 2 year term – which technically means there’s a chance the interest rate could fluctuate if the BoE decides to change its base rate.

How to choose the best 2 year fixed rate bond

The best 2 year fixed rate bond for you will be the one that best meets your individual needs. So here are some points to consider when choosing your account:

  • Interest rate. This is arguably one of the top factors when selecting your bond since you want your money to earn the best interest rate possible if it is tied in for 2 years.
  • How interest is paid. Want to generate a monthly income by getting the interest “paid away” to another account? Most bonds support this, but not all. Some insist that the interest is left and allowed to compound.
  • Account opening and management. Can you easily open the account online or do you need to go into a branch? And can you then manage or view your savings online or from a mobile app if that’s what you would prefer?
  • Eligibility. Some providers reserve the best bond products for their existing customers (who already have a current or savings account with them, for example). If you have an eye on a particular bond, check that it’s available to new customers.
  • Minimum deposit. You might need a minimum deposit of up to £1,000 for the accounts with the best interest rates. So make sure you have that lump sum available and can afford not to have to withdraw it again for the 2 years.

How much money do you need to open a 2-year fixed rate bond?

Typically, there is a minimum deposit of £500 or £1,000 required to open a 2-year fixed rate bond, although there are some accounts that can be opened with as little as £50.

The maximum amount you can put into one of these bonds is usually capped at around the £250,000 mark, but some providers will potentially let you put in millions of pounds (if you’re lucky enough to have that much to spare!).

When thinking about how much money to place in your bond, remember there is tax payable on the earnings from savings interest, although everyone gets a yearly allowance before the tax liability kicks in. Basic-rate taxpayers can earn up to £1,000 in interest each year tax-free, and for higher-rate taxpayers, it’s £500.

Is your money safe in a 2-year fixed rate bond?

Funds deposited at a financial institution with a UK banking licence are protected by the Financial Services Compensation Scheme (FSCS) up to the value of £85,000. This is per person, so any joint accounts will be covered for up to £170,000.

But you must be mindful that these limits apply to each bank (or banking group), so if you have a current account and several savings accounts with one provider containing funds totalling more than £85,000, any amount over this threshold won’t be covered.

Money deposited with financial providers that don’t have a UK banking licence also won’t be covered specifically by the FSCS. Although if the provider is regulated by the FCA and is allowed to take customer deposits in this country, it must have other safeguards in place, such as ring-fencing its customers’ money in accounts held at UK banks.

What happens at the end of the 2 years?

It’s time to cash out! As the bond will have reached the end of its fixed term (or “matured”), your provider will pay you the interest you’ve earned during this time, and you can then draw out your original lump sum plus the interest. Typically, you can choose to have this paid back into your current account or into another fixed term bond if you’d like to continue saving.

Which are the best 2-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.

  • DF Capital – 2 Year Fixed Rate Deposit (Issue 14) - 5.07%
  • Close Brothers Savings – 2 Year Fixed Rate Bond - 5.05%
  • Union Bank of India (UK) Ltd – Union Premier Bond - 4.95%
  • Union Bank of India (UK) Ltd – Fixed Rate Deposit - 4.95%
  • RCI Bank UK – Fixed Term Savings Account - 4.9%

An overview of our 2-year fixed-rate bond comparison

Rates up to 5.07% AER
Number of accounts 121
Minimum investment £1
Maximum investment £9,000,000
Opening options Branch, website, mobile app, post, telephone

Pros and cons of 2 year fixed rate bonds

Pros

  • Good option for investing a lump sum in the medium term
  • Have certainty on the interest rate over the 2 years
  • Generally higher interest rates on offer than with easy access savings accounts

Cons

  • Not suitable if you think you may need to access your savings before the 2 years are up
  • Risk that interest rates in the wider market may go up after your interest rate is locked in
  • High minimum deposit usually required, often about £1,000

Bottom line

As with any other type of savings account, locking money away into a 2-year fixed bonds comes with advantages and disadvantages. But the key thing to bear in mind with a fixed-rate bond of any term up to 5 years is that they can offer a better return than if you had placed your money in an easy access savings account over the same period.

So, if you have at least £500 – £1,000 in spare cash and want to save for a medium term goal, you may want to look at placing it in a 2 year fixed rate bond. Just be confident that you won’t need access to that money in the meantime, as the penalty fees for withdrawing before the end of the fixed term can be substantial.

If you’re looking at saving for a much longer time horizon, say for 10 years or more, you’re more likely to get a better return on your money by investing it. To find out more about how to choose what kind of investments may suit you, take a look at our investments guide.

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.

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