One of the best saving accounts that can help you earn a little more over time is the fixed savings accounts. These are accounts where you put your money over a certain period, and you cannot make any deposits or withdrawals until this period is over.
In many cases, these accounts have higher interest rates than other deposit accounts, but one has to have the patience of not withdrawing this money. In any case, the interest is only paid once get to the end of the term stipulated.
There are two types of fixed-rate bonds. The first is the normal rate where you get a fixed interest at the end of your agreed period. The second is the tracker rate bonds. Here, the interest is usually 1% above the base rate of the Bank of England. You will, therefore, get a 1% plus on your investment until the term of the savings comes to maturity.
Most such deposit accounts do not allow any withdrawals until the stipulated time. However, there are others where the owner can get an amount of their money at a penalty.
Tips on Choosing the Best Fixed Savings Account
Just like any other savings account, you need to know how to get the best deal in the market. The number one tip is knowing how long you are willing to stay without your money. Some accounts have one year or two for fixed deposits while others can go as long as seven years. In many cases, the longer the payment is required to stay in the account, the higher the interest.
Second, you need to check the interest rates. The higher the interest rate, the more reward you will get. Also, consider how much you are willing to save and then look at how often the payout is made. This way, you can be sure of what to expect.