Sponsored by Raisin UK
Periods of economic and political uncertainty, combined with working out exactly when you want to achieve your financial goals, can make it difficult to know whether now’s the right time to fix your savings.
Fixed-rate savings accounts are a good option for savers looking for guaranteed returns over a set period, and who won’t need access to their money during the account term. They generally require you to tie up your savings for anything from three months right up to five years.
When deciding whether to fix your savings now, there are several different factors to consider, beyond just interest rates. Here, we explain what these are to help you work out whether now is the right time for you to commit your money.
What do you think will happen to interest rates?
There’s always endless speculation as to which way and when interest rates might move next, and it can be tempting to wait a while to see if rates might increase.
Interest rates are currently relatively high compared to the last decade. The Bank of England raised rates several times in recent years in a bid to tackle inflation, and this has resulted in higher returns for savers. However, so far there have been three rate cuts since summer 2024, and there is always the possibility that rates may fall again if inflation is brought under control or the economy weakens.
If you believe interest rates may stay higher for longer, a shorter-term one or two-year fixed savings account might be more appealing to you than a longer-term fixed-rate savings account. This would enable you to secure another fixed-term account at a competitive rate when your current term finishes.
However, if you think that interest rates are likely to fall over the next couple of years, you might want to consider taking advantage of current competitive five-year fixed savings rates so that you’ll benefit from higher rates than those that might be available later on if rates do drop.
What are your goals and when do you want to achieve them?
The best time to fix your savings isn’t necessarily when rates are at their highest; it’s when your personal goals and financial situation align with having a fixed-rate account.
Fixed-rate savings accounts are ideal for people who are risk-averse and prefer the stability of guaranteed returns. The good news is that whatever your objectives might be, there’s likely to be a fixed-term account that can help you save towards them, whether you’re likely to need your money in a few months or in a few years.
For example, if you’re saving towards a holiday of a lifetime this Christmas, you might want to go for a six-month term savings account, so your savings will be available in time for your break.
Alternatively, if you’re saving towards home improvements, perhaps because you want to build a conservatory in the future, you might be comfortable topping up your savings for three, four or even five years – whenever you plan to carry out the work.
Get more for your money with Raisin UK
Raisin UK provides a free-to-use savings platform that allows savers to browse, open, and manage accounts with over 40 FSCS-protected banks and building societies.
Apply for savings accounts in just a few clicks, and they’ll handle the rest. Sit back, relax, and skip the paperwork as you watch your money grow.
Are you a serial spender?
As this type of account generally doesn’t allow withdrawals during the fixed-rate term, a fixed-rate account can be a useful option now if you’re worried you might be tempted to dip into your savings.
Bear in mind however, that even if you do tie up most of your money in a fixed-rate account, it’s vital to keep some savings readily available in an easy access account so that you can dip into them if you have any unexpected expenses, such as car or boiler repairs or costly vet bills.
Choosing the right account
If you’ve decided now’s the time to fix your savings, it’s vital to do plenty of research so you can be certain that you’ve found the best account to suit your needs.
If you’re looking for a place to start, Raisin UK is an online marketplace for savings, where you can choose from a wide range of high-interest-paying fixed-rate savings accounts, as well as easy access and notice accounts, from more than 40 banks and building societies.
Top 5 Fixed Rate Accounts
by Raisin UK
Interest
Term
Interest on £5,000
Bank
Deposit Guarentee
Details
Once you’ve compared fixed-rate savings accounts and found the right account or accounts to suit your needs, you can sign up to Raisin UK via its website or app, and apply to open an account. Raisin UK’s partner banks currently include Gatehouse Bank, Investec, Kroo Bank, OakNorth Bank, RCI Bank, and Monument Bank, among others.
All the banks that Raisin UK works with are protected by the Financial Services Compensation Scheme (FSCS), or the European equivalent scheme.
If you’d rather not tie your savings up and are looking for an easy access savings account, bear in mind that rates on these accounts are usually variable, so you’re likely to see the amount of interest you earn fluctuate over time. You’ll therefore need to keep a close eye on your returns and vote with your feet if you find a more competitive account elsewhere.
A final thought…
Fixing your savings can provide valuable peace of mind that you’ll earn a stable return on your hard-earned money.
If you think rates might rise further or you need more flexibility, you may want to consider other options. However, if you need a safe, reliable place to save for a particular goal and you know you won’t need access to your money for a while, fixing your savings now could be a very sensible decision.
Get more for your money with Raisin UK
Raisin UK provides a free-to-use savings platform that allows savers to browse, open, and manage accounts with over 40 FSCS-protected banks and building societies.
Apply for savings accounts in just a few clicks, and they’ll handle the rest. Sit back, relax, and skip the paperwork as you watch your money grow.