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What is a fixed interest rate savings account

A fixed interest rate savings account means the interest calculated on your savings stays the same for a certain length of time. Depending on the financial institution as well as how much you are investing, this could be anything from 12-months to 10-years. This kind of account is ideal for a person who has an amount of cash they can afford to put away for the duration of the fixed rate, this allows healthy growth of their savings.

Before opening a fixed interest rate savings account you will need to check if you are allowed to make withdrawals on it or whether you are required to leave the money untouched. Many banks offer high fixed interest rates on the understanding you do not touch your money until the agreed rate is over. Should you want to withdraw money early, they are within their rights to charge you a penalty charge as well as take back any of the inflated interest accrued. This method is similar to a cash ISA, and will be made clear to you before you open the account.

Barnsley Building Society offer a fixed interest rate savings account at around 4.9% APR. This is fixed for 12-months and you are unable to draw out any of your money until the period is up. However, they do offer a one-off withdrawal which is free from penalty charge, to account for personal or financial emergencies.

Saga offer a special fixed interest rate savings account with a 4.7% APR fixed for five years. This account is for the over-50s and can only be maintained over the internet or by post. There are no penalty charges but you should read the small print to be clear about any other possible restrictions associated with the account.

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