Reviewed by Mustafa Bilgic
Founder, WebCalculator
This tool uses standard compound-interest maths. Tax treatment follows the Personal Savings Allowance and FSCS limits on GOV.UK. Estimates only — not financial advice.
A fixed rate bond locks in a guaranteed return for a set term. Enter your deposit, rate and term to see the interest earned and the maturity value, with the option of annual or monthly interest — plus a tax-allowance check.
Lump sum · fixed term
A fixed rate bond — also called a fixed-term savings account — pays a guaranteed interest rate in return for locking your money away for a set period, typically one to five years. Because the rate is fixed, you know exactly what you'll get at maturity, regardless of what happens to the Bank of England base rate.
| £20,000 at 4.5% | Interest | Maturity value |
|---|---|---|
| 1 year | £900 | £20,900 |
| 2 years | £1,841 | £21,841 |
| 3 years | £2,824 | £22,824 |
| 5 years | £4,924 | £24,924 |
Up to £85,000 per banking licence is protected by the FSCS, so spread larger sums across providers. Interest counts towards your Personal Savings Allowance; with today's rates a sizeable bond can exceed it, so a fixed-rate cash ISA may be more tax-efficient. Compare guaranteed growth with the variable returns of Premium Bonds or general compound interest.
£20,000 in a 3-year bond at 4.5% compounded annually grows to about £22,824, earning roughly £2,824. Monthly-interest versions pay slightly less because the headline is the gross rate, not the AER.
Usually not. Most bonds lock your money for the full term, or charge a heavy penalty. Only commit money you won't need before maturity.
It counts towards your Personal Savings Allowance (£1,000 basic-rate, £500 higher-rate). A fixed-rate cash ISA keeps it tax-free.
Yes, up to £85,000 per banking licence under the FSCS. Spread larger amounts across providers to stay fully protected.