Enter your lump sum and compare exactly what different fixed-rate bond terms pay — gross interest, net of tax, and real return after inflation. Find the best home for money you can lock away.
| Term | Gross Interest | Net Interest | Final Balance | Real Value |
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Fixed-rate savings bonds offer a guaranteed return for a set period — typically 1, 2, 3 or 5 years. The maths is simple: your interest is calculated annually on the full deposit amount at a fixed AER. What matters is the after-tax, after-inflation real return — and that is what this estimator shows. Gross interest is what the bank pays. Net interest is what you keep. Real return is what your money is actually worth at maturity.
The total interest paid by the bank before any deductions. At 5.1% AER on £10,000 over 2 years: £1,045. This is the number banks advertise.
Gross interest minus your income tax rate on the amount above your Personal Savings Allowance (£1,000 for basic rate, £500 for higher rate). A 40% taxpayer on the same bond keeps only £627 if above their PSA.
Net return minus purchasing power lost to inflation. If the bond pays 5.1% gross but inflation runs at 3%, your real gross return is approximately 2.1%. Your money is worth more nominally but buys less relative to current prices.
Fix when: (1) you are confident you will not need the money before maturity; (2) you believe rates will fall during the term; (3) the rate premium over easy-access is meaningful (0.5%+). Never fix money that forms your emergency fund.
Most UK fixed-rate bonds do not allow early access at all during the fixed period. Some providers offer early access with a penalty of 60–180 days' interest. On a 2-year bond at 5.1%, 180 days' penalty = approximately £252 on £10,000 — wiping out the entire advantage over an easy-access account. Only fix money you are certain you will not need.
Yes, if held with an authorised UK bank or building society. The Financial Services Compensation Scheme (FSCS) protects up to £85,000 per person per authorised institution (£170,000 for joint accounts). Always verify FSCS protection before depositing. NS&I bonds are backed by HM Treasury and have unlimited protection.
Most UK fixed-rate bonds do not allow early withdrawal during the term. Some providers offer early access with a penalty — typically 60–180 days of interest. If you need flexibility, keep a portion in an easy-access account and only fix what you are certain you will not need until maturity.
Interest from fixed-rate bonds is taxable income. Basic-rate taxpayers have a £1,000 Personal Savings Allowance (PSA); higher-rate taxpayers have £500. Above these amounts, interest is taxed at 20% or 40%. For bonds that pay interest at maturity, the full interest may fall in a single tax year — which could push you into a higher band. Consider a Cash ISA for larger amounts.
This depends on your view of future interest rates. If you expect rates to fall, locking in 2 years at the current rate is advantageous. If you expect rates to rise, a 1-year bond lets you reinvest at potentially higher rates next year. Our term comparison table shows the exact monetary difference for your specific deposit.