Fixed Rate ISAs Or Bonds
Enjoy a guaranteed rate of interest
Both fixed rate ISAs and bonds offer the opportunity for your funds to earn a fixed rate of interest, usually over a period of time. Choosing the right option for your needs can be confusing.
Fixed rate ISAs or bonds?
A fixed rate Individual Savings Account (ISA) is a type of Cash ISA, providing your savings with a tax free wrapper protecting them from Capital Gains Tax and UK Income Tax. A cash ISA is a low risk, tax efficient savings option, which you will usually have to commit your funds to for a fixed period of time.
A fixed rate bond is higher risk investment option. When you invest in fixed rate bonds you are making a loan of your capital in return for a fixed rate of interest across a predetermined period of time. Any earnings in income or capital growth will be subject to taxation, and your capital is not secure. In return for the higher level of risk and taxation you are likely to get a higher rate of interest than when you place you money into a fixed rate ISA.
Compare cash ISAs and Bonds by using our cash ISA and fixed rate bonds pages. If you’re still unsure, speak to an independent investment advisor for advice tailored to your own individual circustances:
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