Is a fixed saver right for you?
A fixed saver is a savings account where you can safely store your money for a fixed period of time and know that the interest rate won’t change, even if the Bank of England rate does.
Usually in the period that you’ve locked your money away for, you won’t be able to access it. In turn, this means that the rate offered is typically a lot higher than easy access accounts where you can withdraw your cash at any time.
You can usually find fixed savers on the market for between 1 and 5 years. The longer you lock your money away for the higher your interest rate will be.
Who are fixed savers right for?
Fixed savers are great if you’ve got a lump sum of money that you don’t think you will need to use for a while. This may be savings over a longer period of time you’ve kept for a first home or could be a bonus or an inheritance.
There may sometimes be a minimum (and maximum) amount that you can deposit. It’s worth doing the math before you commit to see whether the return on your money will be worth it, though if you’re looking for a place to lock your money and not be tempted to dip into it, fixed savers are still a great option.
Bear in mind that you’re usually given a short window of time in which you can fund your account and some only give you one chance to fund it, so it’s important to know these details and have the sum of money ready to deposit when you open a fixed saver.
How long should you lock your money away?
Have a think about what your long terms goals are with your savings. If you feel you will need the money in the next couple of years, then it may be best to go with a one or two year fixed saver so you can access it when the time comes.
If you’re confident that the rate will remain competitive and you don’t need the money in a hurry, then a longer term may be for you but be sure before you commit.
Things to look out for!
There’s a couple of things that are good to look out for in a fixed saver other than the interest rate, such as how you manage it and what happens to your money upon maturity.
You may prefer to manage your money completely digitally for ease. With mobile banking so commonplace, there are great options, like Tandem Bank, that offer app based fixed savers. This makes it easy to open, check on and manage your savings along with your other accounts.
It’s also worth checking about maturities. Your money ‘maturing’ means that it’s come to end of the fixed term that you chose to lock your money away for. It’s important to make a note of this date (or check that a bank will notify you in app, like we will) so that you can choose what to do with your savings next.