Savings accounts are a place to keep your money and earn interest. There are lots of different types of savings accounts, and things like interest rates, access to your money, fees and risk can vary between them. So it can be a bit overwhelming when you’re trying to pick the right one for you.
Fixed savings accounts lock your money away for a set amount of time
A fixed term savings account (sometimes called a fixed rate bond) is an account that you open for a certain period of time. During that time, you won’t be able to access your money, or add any more money in. In return, banks will often pay you higher interest rates than you can get on easy access accounts.
The interest rate will be fixed for the whole time the account is open, so you’ll know exactly how much you’ll earn by keeping your money in that account. It means you’re protected from drops in the Bank of England’s base rate, which could lower what you earn in interest.
You’ll keep getting the same interest rate, even if the Bank of England’s base rate goes down
The base rate is the interest rate the Bank of England pays to banks that hold money with them (like Monzo). The Bank of England sets the rate to control inflation (which happens when the general price of goods and services goes up).
The base rate influences the rate banks can charge people to borrow money or pay them when they save. So, if the Bank of England’s base rate goes down, interest rates on savings accounts can go down too.
But, if you have money in a Fixed Savings Pot and the Bank of England’s base rate goes down, you’ll keep getting the same interest rate on your savings until the fixed term ends.
Check out our market-leading, 3 month Fixed Savings Pot!
We’ve just launched a 3 month Fixed Savings Pot. This Savings Pot is provided by another bank called OakNorth, and has a market-leading interest rate of 1.35% (AER, variable). This rate is exclusive to Monzo’s savings marketplace! 🎉
By adding this product, we now have 3, 6, 9 and 12 month Fixed Savings Pots available in our marketplace.
Check them out in the Monzo app now!