6 month fixed rate bonds

If you’re looking to save money and take advantage of some of the best interest rates available, opening a fixed rate bond might be right for you. Although you can choose from set terms of up to five years, a 6 month fixed rate bond might be a good choice for you if you don’t want to lock your money away for too long, but you still want to earn a good amount of interest.

Why choose a 6 month fixed rate bond? If you have a lump sum of money that you’re prepared to lock away for six months, you may find that you can get a higher interest rate through a 6six month fixed rate bond (also known as a fixed term deposit) than you would typically get with an ISA or easy access account.

Register now to view 6 month fixed rate bonds with competitive rates.

A 6 month fixed rate bond is a savings account that locks your money away at a fixed rate of interest for six months. When you open a 6 month fixed rate savings account, the rate of interest you earn won’t change for six months, even if the Bank of England’s base rate (which affects how banks set their own rates) changes during that time.

If you have a lump sum to invest and want a short-term return of less than a year on your savings, a 6 month fixed rate bond could be ideal. It might also be a good option if you’re waiting for interest rates to rise before making a longer-term decision about where to put your savings.

In the UK, 6 month fixed rate bonds commonly offer higher interest rates than ISAs or easy access savings accounts, so you’ll also get stability and certainty for the duration of your term.

Yes, you’ll hear 6 month fixed rate bonds also called 6 month fixed term deposits, 6 month fixed rate savings, 6 month fixed rate savings bonds and 6 month fixed rate savings accounts.

Yes – if you want a longer-term option for your savings, you can also apply for fixed rate savings accounts with terms of one year, two years, three years, or five years. The advantage of longer-term bonds is that you can sometimes earn more over the term if the account offers compounding.

Which fixed rate bond you opt for might depend on your savings goals, and whether you’re saving for something sooner or further off in the future. Whatever account you choose, you won’t be able to access your deposit until the account matures at the end of the term.

You can apply for any number of fixed rate savings accounts. It’s important to note that FSCS deposit protection applies per person, per bank, based on the bank’s regulatory licence. If you open more than one account with different brands under the same licence, your total balance across those accounts contributes towards the £85,000 deposit protection limit.

Opening a 6 month fixed rate bond means you’ll know exactly what you’ll earn from your savings and when your savings will be available. If there’s something you’re saving for in the short-term, but you want to earn interest while you wait, a 6 month fixed rate savings account might be a good option. A 6 month fixed rate bond can be an alternative to an easy access savings account if you aren’t planning to withdraw funds in the short term too. If you have a lump sum you’re willing to invest for a fixed period, a 6 month fixed rate bond could benefit you because:

• Your interest rate is fixed for six months, regardless of any changes to the Bank of England’s base rate

• You’ll know how much interest you’ll earn

• It’s easy to plan 

• Your deposit is protected from changes to the base interest rate

1. You make a one-off deposit, which has to be above your chosen bank’s minimum deposit. You can’t deposit more money into the account later, so it’s important to carefully  choose how much you want to put away.
2. Your deposit is locked away for the entire term, so you can’t withdraw or access it until six months later.
3. You earn interest at a fixed rate, which is displayed as AER (annual equivalent rate). With 6 month fixed rate savings, you’ll earn roughly half of the annual rate.
4. When the six months are up, you are paid back your deposit plus interest, or you can reinvest the entire sum in a new account.

Deposit limits vary between providers. Some will accept up to £1 million or more, but Raisin UK caps deposits at £85,000 per person, per bank to make sure that the funds are covered by the FSCS deposit protection scheme (although it’s important to note that the FSCS protection limit applies to all accounts held with the same bank, so you may want to consider if you hold any other funds with the provider before choosing your deposit amount).

The interest you’ll earn is calculated as a yearly percentage, or annual equivalent rate (AER). How much you’ll personally earn is determined by the following:

1. The duration of your fixed rate, i.e. six months
2. The deposit amount
3. The interest rate (AER)
4. How interest is earned according to the bank

To see how it works, let’s say you deposit £1,000 into a 6 month fixed rate bond offering 4.40% AER, with no compounding. Because AER reflects the rate you’d earn if the account was open for a year, a half-year term means you’d earn approximately half the annual rate:

£1,000 × (4.40% ÷ 2) = £22

Once the six months are up, you’d earn £22 in interest, for a total of £1,022 returned to you.

For 6 month fixed rate bonds, like fixed rate bonds of any term, when you earn interest is dependent on your bank. Some banks offer options where interest is paid monthly or compounded, but these are less common for shorter terms of six months or less. With 6 month fixed rate savings, interest tends to be paid at the end of the term, i.e. at maturity. You can find out how and when a bank will pay interest by reading the description of each savings account. 

When your account matures after six months, you can choose from the following options:

1. Renew your account with the same bank and open a new fixed rate bond using either your original deposit amount or your original deposit amount plus any interest you’ve earned

2. Withdraw your deposit plus any interest you’ve earned and close the account

3. Transfer your savings to another account

Your deposit will be protected by the Financial Services Compensation Scheme (FSCS) if your savings account is with a regulated UK bank. This covers deposits of up to £85,000 (including interest) per person, per bank, should your bank fail.

All fixed rate savings accounts in our marketplace include deposit protection. If you open a savings account from a UK-regulated bank or building society through Raisin UK, your deposit will be protected by the FSCS.

Because the interest rate is guaranteed to the end of your term, you have peace of mind knowing exactly how much you’ll earn. At the end of your agreed term, you’ll receive your original deposit back along with any interest you’ve earned. Please be aware that the £85,000 FSCS protection limit applies to all funds held with a bank. For example: if you hold two fixed rate bonds with the same bank, the FSCS will protect up to £85,000 across both accounts not per account.

• Our 6 month fixed rate bonds from UK-regulated banks and building societies are free to open and can be managed and accessed in one place.

• Easy access to your savings dashboard online and through the Raisin app, so you can track your balance and interest at any time.

• You can fund your account gradually by making multiple smaller transfers into your Raisin UK Transaction Account before your bond opens. This means you can save up for the minimum deposit at your own pace. 

Register and log in to apply for the best 6 month fixed rate bond for you from the table above.

Need more flexibility from your savings? Check out our notice accounts.

To open savings accounts from our partner banks and building societies, you first need to open a Raisin UK Account, after which you can apply for 6 month Fixed Rate Bonds in three steps:

1. Log in to your Raisin UK Account
2. Click to apply for a savings account
3. Transfer your deposit

You’ll have a funding window (typically 60 days) within which to transfer your deposit. As long as you fund the account within this time, your money will start earning interest at the advertised rate. Once your application is approved, you can deposit your lump sum and start earning money from your savings straight away. 

If you have any questions, our customer service team is here to help. Contact us today.