Money Advice Service

Savings Bonds are interest paying deposit products offered by banks and building societies and occasionally National Savings and Investments (NS&I) for a set term. A bond of this type is really a fixed term loan from you to the provider (the bond issuer) usually in return for a higher interest rate than you may get from traditional deposit accounts.

Savings Bonds – are they for you?

Also known as ‘fixed-rate bonds’ or ‘fixed-term deposits’.

A Savings Bond may be for you if:

  • you have £1,000 or more in cash that you can tie up for at least six months or the term of the bond
  • you want a potentially higher return than on your regular savings account
  • you don’t want to risk losing any of your capital

What types of Savings Bonds are there?

Fixed Rate Savings Bonds guarantee a set interest rate over a specified term - most savings bonds pay fixed interest.

Tracker Bonds track a particular index or rate (for example inflation or Bank of England base rate) over a set period of time, from six months to five years.

Although the minimum investment for some Savings Bonds is £1, the minimum deposit is usually £1,000 or £2,000, with a maximum typically of £500,000. Interest rates are sometimes tiered according to the amount you deposit.

Structured deposits are sometimes advertised as savings bond. They often promise higher returns, but carry more risk than traditional savings bonds. If you think the bond you are considering may be a structured product read our guide.

Be sure you understand what you are buying.

The risk and return of Savings Bonds

  • You get your original capital back at the end of the term plus the accrued interest.
  • These products tend to offer higher interest rates than instant access accounts.
  • With Fixed Rate Savings Bonds you know at the outset exactly how much you will receive when the bond matures (however, this is not the case with tracker bonds).
  • Your original investment will not hold its value in real terms (its ‘buying power’) if the interest you are getting is less than the rate of inflation over the investment period.
If the bond you are considering is a structured deposit the risks will be different. Read our guide to Structured products and be sure you understand what you are buying.

Accessing your money from Savings Bonds

  • These products usually require you to tie up your money from between six months and five years.
  • There can be big penalties for early withdrawal so make sure you know what these are and can manage before you tie up your money up.
  • In some cases you may not be allowed to access any of your capital until the end of the term - check the facts before you commit.


Check the product literature for charges if you withdraw your money early. Withdrawing your money may not be allowed in some products.

Are Savings Bonds safe and secure?

Cash you put into UK banks or building societies (that are authorised by the Prudential Regulation Authority) is protected by the Financial Services Compensation Scheme (FSCS). The FSCS savings protection limit is £85,000 (or £170,000 for joint accounts) per authorised firm.

It is worth noting that some banking brands are part of the same authorised firm. If you have more than the limit within the same bank, or authorised firm, it’s a good idea to move the excess to make sure your money is protected.

Find out which banks are part of which authorised firms on the Bank of England website.

Where to get a Cash Savings Bond

You buy Savings Bonds directly from a bank or building society or NS&I. Each bond issue is limited so be sure to keep an eye out for good deals.

Buy online, through a branch, by post or over the phone depending on the product and provider.

Comparison websites are a good starting point for anyone trying to find a savings account tailored to their needs.

We recommend the following websites for comparing savings accounts:


  • Comparison websites won’t all give you the same results, so make sure you use more than one site before making a decision.
  • It is also important to do some research into the type of product and features you need before making a purchase or changing supplier.
  • Find out more in our guide to comparison sites.

Tax and Savings Bonds

Interest on your savings is paid gross and you may have to pay tax on it if it is above your Personal Savings Allowance.

Some savings bonds are available as tax-free ISAs.

Find out more about the Personal Savings Allowance and tax on savings on GOV.UK.

If things go wrong with your Savings Bonds

If you are unhappy with the service you receive or want to make a complaint about a Savings Bond you have bought, read our page Sort out a money problem, make a complaint or get compensation.

This article is provided by the Money Advice Service.