A Fixed rate bond (also known as fixed term bonds) provides a higher return on your investment savings by offering a higher interest than to
conventional
savings accounts. Most high street banks provide fixed rate bond accounts, which provide a pre defined guarantee return on your savings.
Fixed rate bonds put you in the driving seat of your saving arrangements, giving you control on how long you are willing to invest and for what duration. Anything from a 6 month plan to a five year plan.
Do they provide better returns?
Bonds in general provide a higher rate of interest than bank accounts with some providers offering no maximum deposit limits. Fixed rate bond accounts are suited for people who want to save long term without worrying of withdrawing money before the end date.
There are several bond accounts available and this affects how much interest your money will make
Bond accounts that offer interest added onto your monthly balance - Giving you more interest throughout the year based on the total balance.
Bond accounts that pay you interest owed at the end of the term.
Bond accounts that pay your interest into a different savings account - Paid on a monthly basis, meaning you are only paid interest on the original amount invested.
Can I add additional funds to my account?
No not usually - as you are only able to make one deposit, with no additional deposits during the fixed term.
What happens if I need my money early?
In the case of emergencies some providers will let you access your money, you may loose part or all of the interest you have earned before funds are released.
