Fixed rate savings (Bonds)

Term is the length of time you agree to lock away your savings. With a fixed rate savings account, your interest rate is guaranteed to stay the same for the length of your term.

Maturity is when your account reaches the end of your fixed term. At maturity, you can choose to reinvest your money for another fixed term, apply for a different type of savings account, or withdraw your savings and close your account.

Gross is the interest rate paid before tax is deducted.

AER (Annual Equivalent Rate) shows what the interest rate would be if interest was paid and compounded each year, helping you compare savings products. However, with our Fixed Rate Saver, interest is paid into your linked account either monthly or annually so is not compounded.

Your eligible deposits held by a UK establishment of Barclays Bank UK PLC are protected up to a total of £120,000 by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme. This limit is applied to the total of any deposits you have with the following: Barclays, Barclays Business Banking, Barclays Premier Banking, Barclays Wealth Management and Tesco Bank. Any total deposits you hold above the limit between these brands are unlikely to be covered.

For more information, please see our page on how your money is protected.

Whether a fixed rate account is right for you depends on your individual circumstances and savings goals.

Fixed rate accounts are generally designed for people who are comfortable leaving their money in the account until the end of the fixed term.

If you need flexibility to withdraw money, you may want to consider whether an instant access account better meets your needs.

ISA stands for ‘Individual Savings Account’.

When you save in an ISA, the interest you earn is tax-free - meaning you don’t have to pay income tax on it. The tax rules set by HM Revenue & Customs are subject to change, and the value of tax benefits depends on your individual circumstances.

There is a limit to how much you can save in an ISA within each tax year. For the current tax year, the ISA limit is £20,000.

This is the total amount you can save across all the ISA accounts you may hold combined - not per account.

You won’t always have to pay tax on the interest you earn in a regular Savings Account, it depends if the amount of interest you earn exceeds your Personal Savings Allowance.

When you earn interest from a savings account that is not an ISA, it will count towards your Personal Savings Allowance.

This does not necessarily mean you'll pay income tax on the interest you earn, but it could if the amount of interest you earn goes beyond your Personal Savings Allowance. Most people can earn some interest from their savings without paying tax*.

The Personal Savings Allowance depends on what rate of income tax you pay:

• Basic rate (20%) taxpayers: £1,000 in savings interest per year with no tax.
• Higher rate (40%) taxpayers: £500 in savings interest per year with no tax.
• Additional rate (45%) taxpayers: £0 - additional rate taxpayers do not get a Personal Savings Allowance.
• If you're a non-taxpayer (you have less than £12,570 income per year), you may be able to earn as much as £18,570 in savings interest tax-free.

If you’ve been saving in an ISA, the interest you earn will not contribute to your Personal Savings Allowance. To learn more about how ISAs work, please see our guide What is an ISA and how do they work?

Tesco Bank will not deduct tax from the interest you earn. The tax rules set by HM Revenue & Customs are subject to change, and the value of tax benefits depends on your individual circumstances.

*Source: GOV.UK "Tax on savings interest"

No, you generally cannot make withdrawals from a fixed rate account until the end of the term (maturity).

With our Fixed Rate Saver, you can only access your funds early in exceptional circumstances, where the account will be closed with no charge. 

With our Fixed Rate Cash ISA, if you need early access to your funds, you have three options: 

• Withdraw the balance. Once money is withdrawn, it loses its tax-free status.
• Transfer the balance to another Tesco Bank Cash ISA. For more information, please refer to our FAQ How do I move my existing Tesco Bank Cash ISA to a new Tesco Bank Cash ISA?
• Transfer the balance to an ISA with another provider. To do this, please contact the other provider directly - they will arrange everything with us.

Regardless of which option you choose, your Fixed Rate Cash ISA will be closed once you have moved your money. You'll also be charged a fee of 90 days’ interest, which will be deducted from the account balance (unless you're accessing your funds early due to exceptional circumstances).

This depends on the type of fixed rate account you have.

With our Fixed Rate Saver, you have a few options with what to do with your money as your account approaches maturity. If we do not hear from you before your account matures, we’ll send the interest you’ve made to your linked account. After this, your account will begin to earn our standard variable rate.

With our Fixed Rate Cash ISA, your account will mature into an Instant Access Cash ISA at the end of your fixed term, earning our standard variable rate. Once your account has matured, you can then choose what to do with your money.