Fixed rate bonds lock your money away for a set period — typically 1 to 5 years — in exchange for a guaranteed, often higher, interest rate. In 2026, the best 1-year rates are around 5% AER, significantly above the Bank of England base rate.
Best Fixed Rate Bond Rates — May 2026
Best 1-Year Fixed Rate Bonds
| Provider | AER | Min. deposit | FSCS protected |
|---|---|---|---|
| Atom Bank | 5.10% | £50 | Yes |
| Zopa Bank | 5.05% | £1,000 | Yes |
| Shawbrook Bank | 5.00% | £1,000 | Yes |
| Tandem Bank | 4.95% | £1 | Yes |
| Charter Savings Bank | 4.90% | £5,000 | Yes |
| Marcus by Goldman Sachs | 4.85% | £1 | Yes |
| Close Brothers | 4.85% | £10,000 | Yes |
Best 2-Year Fixed Rate Bonds
| Provider | AER | Min. deposit |
|---|---|---|
| Atom Bank | 4.80% | £50 |
| Shawbrook Bank | 4.75% | £1,000 |
| Zopa Bank | 4.70% | £1,000 |
| Secure Trust Bank | 4.65% | £1,000 |
| Ford Money | 4.60% | £500 |
| Charter Savings Bank | 4.60% | £5,000 |
Best 5-Year Fixed Rate Bonds
| Provider | AER | Min. deposit |
|---|---|---|
| Shawbrook Bank | 4.40% | £1,000 |
| Close Brothers | 4.35% | £10,000 |
| Secure Trust Bank | 4.30% | £1,000 |
| Atom Bank | 4.25% | £50 |
| Gatehouse Bank | 4.20% | £1,000 |
Rates as of May 2026. Fixed rate bonds change frequently — always check directly with the provider.
Fixed Rate Bond vs Easy-Access Savings
| Fixed rate bond | Easy-access account | |
|---|---|---|
| Rate (typical 2026) | 4.8–5.1% (1 year) | 4.4–4.9% |
| Access | None until maturity | Anytime |
| Rate guarantee | Yes — fixed for full term | No — can be cut |
| FSCS protection | Yes (£85,000) | Yes (£85,000) |
| Best for | Money you won’t need | Emergency fund; flexible savings |
Rate premium for locking in: In May 2026, the best 1-year fixed rate (5.10%) beats the best easy-access rate (4.90%) by about 0.20 percentage points. On £10,000, that is £20 extra interest per year — the trade-off is losing access.
Worked Example — £10,000 in Different Bond Terms
| Term | Rate | Interest earned | Total after term |
|---|---|---|---|
| Easy access | 4.90% | £490/year | £10,490 |
| 1-year fixed | 5.10% | £510 | £10,510 |
| 2-year fixed | 4.80% | £490/year → £995 total | £10,995 |
| 5-year fixed | 4.40% | £4,800 (compounded) approx. | £14,800 |
The Laddering Strategy
Laddering spreads savings across multiple bond terms to balance rate and access:
Example — £30,000 split into three equal tranches:
- £10,000 in a 1-year bond at 5.10% — matures in 12 months
- £10,000 in a 2-year bond at 4.80% — matures in 24 months
- £10,000 in a 3-year bond at 4.60% — matures in 36 months
Each year, one tranche matures. You can spend it, reinvest at whatever rate is available then, or extend into a longer term. This gives ongoing access while capturing decent fixed rates.
Tax on Fixed Rate Bond Interest
Interest from fixed rate bonds counts as savings income, taxable above your Personal Savings Allowance:
| Tax band | Personal Savings Allowance | Tax on interest above this |
|---|---|---|
| Basic rate taxpayer | £1,000 | 20% |
| Higher rate taxpayer | £500 | 40% |
| Additional rate taxpayer | £0 | 45% |
To shelter interest from tax: Use your £20,000 ISA allowance first. A fixed rate Cash ISA gives the same rates as regular bonds but with no tax on the interest, ever.
For related savings content see best easy-access savings accounts, best cash ISA rates 2026, and Personal Savings Allowance explained.