A complete UK guide to fixed term savings

Below, we explain how fixed term savings work, the advantages and trade-offs, and how they compare to other types of savings accounts so you can decide whether they’re right for your plans. 

OakNorth Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Eligible deposits are protected up to £120,000 per person by the Financial Services Compensation Scheme (FSCS).

A fixed term savings account lets you lock away a lump sum for a set period, typically between 6 to 60 months, in return for a guaranteed interest rate. Because your money stays untouched, providers can typically offer higher rates than on easy access accounts, though this will always depend on the provider. During that term, you usually can’t access your money without penalties.

Think of it as a closed savings pot: you pay money in, leave it to grow, and access it only once the term ends. If you don’t need to dip into those savings, the certainty can be reassuring. 

If you’ve ever wondered “is a fixed term savings account right for me?” or “how to choose a fixed term savings account?”, understanding this basic trade-off between access and rate is the best place to start.

When you open a fixed term account, you: 

• Choose your term, such as 9 months, 1 year, 2 years or 5 years. 
• Pay in your deposit within the provider’s funding window. 
• Lock in your interest rate for the entire term. 
• Receive your savings plus interest either annually or at maturity. 

Your rate will not change, even if wider market rates rise or fall, so you’ll always know what rate you’re earning for the duration of the term — whether interest is paid annually or at the end of the term (depending on the product/ provider you choose). 

At OakNorth, interest is paid at the end of the term. You can track your balance and expected interest throughout, and use our online calculator to compare terms and deposit amounts before applying. 

This makes it easier to plan ahead and lock in a savings rate that matches your goals, especially if you’re a UK saver looking for a clear, guaranteed rate over a specific timeframe. 

Fixed term savings accounts are best suited to people who: 

• Have spare money they won’t need for a while. 
• Want the certainty of a fixed interest rate. 
• Prefer saving in a way that removes the temptation to dip in. 

They’re often used for saving towards known future costs – such as a car, home move, school or university expenses, or other milestones where the timing is fairly clear. 

A helpful rule of thumb: only lock away what you’re confident you won’t need during the term.

We offer a range of fixed term savings accounts from 6 to 60 months so you can pick the option that suits your timeframe. 

Here’s a quick overview of common terms: 

9 months – short-term focus 

A shorter commitment that suits savers working towards near-term goals or looking to try fixed term saving for the first time. It could work well if you’re building a pot for a near-term goal – like covering upcoming expenses, preparing for a new baby, or setting yourself a focused savings challenge without committing to a full year. 

12 or 24 months – medium-term planning 

A one- or two-year term can help you build towards larger goals– such as a dream holiday, a wedding, or another major milestone – with a predictable return.  

60 months – long-term commitment 

A five-year term gives your savings more time to grow and can be useful for longer-range plans such as your children’s future needs, or early retirement plans, or future financial security. 

Product availability, terms and rates may change. Always check the latest details before applying. 

When considering a fixed term account, you should: 

• Match the term to your goal. Pick a maturity date that aligns with when you’ll need the money. 
• Keep flexibility elsewhere. Many savers hold emergency funds in easy access accounts and use fixed terms for longer-term funds. 
• Avoid early access needs. Fixed accounts are designed to be left untouched –early withdrawals are usually not allowed or may come with penalties such as reduced interest. 

Before you open an account, ask yourself whether you can comfortably leave that money untouched for the full term. If you’re unsure or want more flexibility, keeping some savings in an easy access savings or easy access tracker account is usually a sensible balance. 

What are the advantages of fixed term saving 

Fixed term savings accounts offer: 

Higher interest rates 

You often earn more compared to instant or easy-access accounts because you’re committing your money for longer. 

Certainty and predictability 

Your rate is fixed for the full term, making it easier to plan and compare options. 

Helpful savings discipline 

Locking money away can support consistent saving habits and reduce temptation to spend. 

What are the disadvantages to be aware of a fixed term savings 

While fixed terms offer certainty, they come with trade-offs: 

Limited access 

You normally can’t withdraw early. If you can, interest may be reduced or removed. 

Potential to miss out if rates rise 

Your rate won’t increase during the term, even if market rates do. 

Inflation risk 

If inflation outpaces your interest rate, the real value of your savings may fall. 

One-off deposit 

Most fixed accounts must be funded shortly after opening, and you can’t add more money later. 

*This is the rate that the provider adds or subtracts from the reference rate

Is a fixed term savings account better than an easy access savings account or an easy access tracker account? 

There’s no single “best” account, it depends on your goals and flexibility needs: 

A fixed term savings account might work for you if: 

• Won’t need the money for a set period. 
• Want a guaranteed return. 
• Prefer a typically higher fixed rate. 

Whereas an easy access savings account may be better if you: 

• Need flexibility. 
• Are building an emergency fund. 
• Expect income or expenses to fluctuate. 

An easy access tracker account is an option if you: 

• Want easy access plus a rate that tracks the Bank of England base rate. 
• Want the potential to benefit when rates rise. 

Many savers use a mix to balance flexibility and certainty: keeping short-term and emergency savings in easy access or easy access tracker accounts and using a fixed term savings account to lock away money they can comfortably leave untouched for longer. 

1. What is a fixed term savings account in simple terms?

It’s a savings account where you lock your money away for a set period in exchange for a guaranteed rate. 

2. How do I choose the right term?

Start with when you’ll need the money. Pick a term that finishes shortly before that date. 

3. Can I withdraw early from a fixed term savings account?

Generally no. If your provider allows early access, penalties may apply. At OakNorth, early withdrawals aren’t permitted on Fixed Term savings account— your money stays locked in until the end of the term. 

4. What happens at maturity or end of fixed term?

You’ll be able to access your savings plus interest, reinvest them into another fixed term account, or move them to another account. 

5. Are fixed term accounts safe?

Yes— Fixed term accounts are as safe as easy access accounts with the same provider, as both are protected by the FSCS. Eligible deposits with OakNorth are protected by the FSCS up to £120,000 per person. 

6. Can I have both fixed term and easy access accounts?

Yes – many people use both to balance flexibility and certainty.