Savings bonds

A savings bond is normally a cash deposit account that pays a fixed rate for an agreed term. The provider holds the deposit and returns it with interest under the account terms.

Eligible deposits with a UK-authorised bank or building society can receive FSCS protection. NS&I products are backed by HM Treasury under their own arrangements. Always check the provider and product rather than relying on the word bond.

You normally deposit a lump sum during the account's funding window. The rate is fixed, the term runs to a stated maturity date and interest is paid monthly, annually or at maturity according to the product terms.

• Deposit the lump sum

  Check the minimum, maximum and how long you have to fund the account.

• Hold through the term

  The rate stays fixed, but access is usually restricted and you may miss higher rates if the market rises.

• Receive interest

  Interest may be paid away, credited during the term or added at maturity. This can affect compounding and tax timing.

• Give maturity instructions

  Tell the provider whether to withdraw, reinvest or move the balance before any default process applies.

A savings bond can suit a lump sum that is not needed for emergencies or planned spending during the term. The known end date can be useful when it matches a future purchase or another financial milestone.

• Known date

  Choose a term that ends before the money is required.

• Known return

  A fixed rate makes the maturity value more predictable.

• Spare cash

  Keep an accessible reserve before locking away the remainder.

Compare the whole account, not only the advertised rate. The best bond is one whose access date and rules match the job for the money.

1. 1

   Match the maturity date

   Choose a term that ends before the money is needed and allow time for the provider to return it.

2. 2

   Compare AER and payout timing

   Check the annual return and whether interest compounds, is paid away or arrives at maturity.

3. 3

   Read the access rules

   Confirm whether early withdrawal is possible and what it would cost.

4. 4

   Check protection

   Identify the authorised firm and total eligible balances across brands sharing its licence.

5. 5

   Check tax and alternatives

   Compare an ordinary bond after tax with fixed Cash ISAs, notice accounts and easy-access options.

Compare current examples across easy-access, notice, fixed-term, Cash ISA and regular-saver accounts. Rates change, so confirm the provider's current terms before applying.

Do not ignore maturity messages. Providers may move the money into a low-paying holding account, return it to a nominated account or offer a new fixed term depending on the instructions and product terms.

• Withdraw

  Move the full balance to an accessible account if the money is needed.

• Reinvest

  Compare the offered rollover rate with the wider market before accepting another term.

• Split the balance

  Keep part accessible and refix only the amount that can remain untouched.

• Switch provider

  Move to a different suitable account if its rate and terms are stronger.

If the term or access rules do not fit, consider an easy-access account, notice account, Cash ISA or Premium Bonds. Investing is a different choice with the possibility of loss and is generally more relevant to longer timeframes.

Use the fixed-term accounts guide for a deeper look at maturity, tax timing and bond laddering, or compare current accounts before deciding.