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There are some things you'll need to know before deciding whether or not a bond is right for you, so it's time to find out more. In essence, a bond is a type of savings account that usually last for a number of years.

Let's look at some of the finer details and five reasons to choose one.

Reason one - your money is locked away

These are savings accounts that run for a number of years - usually between one and seven years - and you won't be able to withdraw your money until after that period. As such, your savings aren't available for frivolous and lavish purchases, so a bond could help you to focus on your savings goals. It's because your money is locked away for a period that we have reason two.

Reason two - interest rates

Bonds are likely to provide the highest interest rate you'll find for savings products, but you'll still need to do some research to ascertain that this is right for you. And remember, with a Fixed Rate Bond, the interest you earn won't change; even if the Bank of England base rate goes up or down.

Reason three - can help you plan for the future

If you've got a big event on the horizon (such as your retirement, a big birthday or a wedding anniversary), you might want to think about using a bond to help you save and earn interest on your original deposit. Knowing when the event takes place means you could consider opening a bond several years before the special date so that your money is available in time. This leads us into reason number four.

Reason four - you could know how much you'll be getting

There are different types of bonds available, so it's crucial to do your research to check what you're choosing is right for your circumstances and situation. Some bonds link some or all of your return to stock market performance, whereas a Fixed Rate Bond is just that; a fixed rate for the duration.

Reason five - you can put away a big sum

When you open a Fixed Rate Bond, you'll only be able to deposit your lump sum at the beginning of your term; deposits aren't permitted part way through the term. However, any amount can be invested (subject to the provider's terms, which can be a ceiling of £1 million), so you're not constrained by a £20,000 investment limit as you would be with an ISA.

If you can afford to lock away your savings for a number of years, you may want to find out more. Extra information can be found at our Fixed Rate Bonds page.

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