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Fixed savings rates hit a two-year high: should you lock in now?
NS&I joins others boosting interest of fixed bonds, with some deals as high as 5%
Matthew is an award-winning journalist, specialising in savings, tax and insurance.
Savers can now earn up to 5% AER on fixed-term accounts, with rates hitting a two-year high.
Several providers have launched new deals in recent weeks and National Savings & Investments (NS&I) is the latest to boost returns on its fixed bonds. But is now the time to lock in a top rate, or could even better deals be just around the corner?
To help you decide, we explain why fixed deals have seen an uptick and reveal the accounts currently offering the best returns.
Fixed rates hit two-year peak
Fixed-rate savings interest soared between April 2021 and October 2023, with the best one-year deal reaching 6.2% AER. After months of decline, rates are back on the rise and at their strongest since 2024.
Which? analysis of Moneyfacts data found that, as of 5 August 2026, the best rate for a one-year fixed-term account is 4.91% AER. However, you can earn up to 5% by locking your money away for longer than 12 months.
Cash Isa rates are also riding high, with 4.66% available for a one-year fix, rising to 4.85% for the market-leading five-year account.
Our table shows the top fixed-term savings accounts and cash Isas, ordered by term:
| One-year fixed rate | Habib Bank Zurich | HBZ Fixed Rate e-Deposit Account | 4.91% | n/a | £5,000 | Internet | On maturity |
| One-year fixed rate cash Isa | Tandem Bank | Fixed Rate Cash ISA | 4.67% | n/a | £0 | Mobile app | Monthly |
| Two-year fixed rate | Recognise Bank | 2 Year Fixed Rate Account | 4.86% | n/a | £1,000 | Internet | Monthly, yearly |
| Two-year fixed rate cash Isa | Cynergy Bank | Fixed Rate Cash ISA | 4.75% | n/a | £500 | Internet | Anniversary |
| Three-year fixed rate | Investec Save | Fixed Rate Saver | 5% | n/a | £5,000 | Internet | Yearly |
| Three-year fixed rate cash Isa | Tandem Bank | Fixed Rate Cash ISA | 4.78% | n/a | £0 | Mobile app | Monthly |
| Four-year fixed rate | RECOMMENDED PROVIDER Aldermore | 4 Year Fixed Rate Savings Account | 4.61% | 74% | £1,000 | Internet | Monthly, yearly |
| Four-year fixed rate cash Isa | UBL UK | 4 Year Fixed Rate Cash ISA | 3.91% | n/a | £2,000 | Branch, internet, mobile app, postal | Monthly, quarterly, anniversary, on maturity |
| Five-year fixed rate | Atom Bank | 5 Year Fixed Saver | 5% | 76% | £50 | Mobile app | Monthly, yearly |
| Five-year fixed rate cash Isa | Leek Building Society | 5 Year Fixed Rate Cash ISA | 4.85% | n/a | £1,000 | Branch, internet, postal | Anniversary |
Table notes: rates sourced from Moneyfacts on 5 August 2026. Provider customer score is based on savers' overall satisfaction with the brand and how likely they are to recommend it to others. n/a means sample size was too small for us to generate a provider score.
- Find out more: best savings accounts.
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Compare and chooseNS&I's fixed bonds also boosted
NS&I is one of the biggest household names to raise rates on its range of fixed-term accounts.
Guaranteed Growth Bonds pay interest annually and Guaranteed Income Bonds pay returns into savers' nominated current accounts every month. Both allow you to invest between £500 and £1m.
This table shows the accounts ordered by term:
| Account | Previous rate | Rate from 31 July 2026 |
|---|---|---|
| One-year Guaranteed Growth Bonds | 4.69% gross/AER | 4.72% gross/AER |
| One-year Guaranteed Income Bonds | 4.6% gross/4.07% AER | 4.63% gross/4.72% AER |
| Two-year Guaranteed Growth Bonds | 4.67% gross/AER | 4.7% gross/AER |
| Two-year Guaranteed Income Bonds | 4.58% gross/3.98% AER | 4.61% gross/4.7% AER |
| Three-year Guaranteed Growth Bonds | 4.65% gross/AER | 4.68% gross/AER |
| Three-year Guaranteed Income Bonds | 4.56% gross/4.65% AER | 4.59% gross/4.68% AER |
| Five-year Guaranteed Growth Bonds | 4.55% gross/AER | 4.75% gross/AER |
| Five-year Guaranteed Income Bonds | 4.46% gross/4.55% AER | 4.65% gross/4.75% AER |
Source: NS&I
What's the difference between gross and AER?
Like many providers, NS&I lists rates using the terms gross and AER. The former is best understood as the flat rate of interest that's actually paid, while the latter takes into account the effect of compounding – the snowball effect of income earned from interest growing together with your original investment.
Understanding the difference between gross and AER matters when it comes to Income Bonds. Because returns are paid into your nominated bank account every month, interest isn't compounded.
The lower gross rate that NS&I quotes for those products is therefore a more accurate reflection of the amount of savings income earned over the course of a year.
NS&I is unusual in formally separating its fixed-term bonds by how they pay out. With most providers, it’s the same account and you make the decision of how interest will be paid when you apply. So, when choosing, consider if you really need interest paid out and whether it’s worth it.
What's behind the rise?
The record savings highs we've seen over the past few years are partly a result of the Bank of England raising the base rate 14 times in a row between December 2021 and August 2023. But when the base rate started dropping in August 2024, interest on savings fell with it.
The base rate has been held at 3.75% since December 2025, but providers may be betting the conflict in the Middle East will fuel inflation and force further rate rises later this year – prompting them to improve savings deals now.
The future path of rates can never be certain
Sarah Coles, head of personal finance at AJ Bell, believes competition is also playing a major role, with newer banks jostling for position in an effort to fill their coffers and hit funding targets.
However, she warns savers against taking a 'wait and see' approach to fixing, as rates won't remain this high forever.
'The future path of rates can never be certain, so even if you think that inflation will remain higher and rates will have to rise again, you could be wrong-footed by geopolitical events, and rates could fall,' Coles says.
'Plus, in the interim, your money may be sitting somewhere far less rewarding. Instead of hanging around, when rates are strong, it’s worth taking advantage of the best possible rate for the right period that’s available right now.'
- Find out more: what are the different types of savings account?
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Join Which? MoneyHow to get the best fixed return
Moving your cash to a higher-paying account is the quickest way to grow your savings. Here is how to maximize your returns:
Fix for longer for best returns
The general rule of thumb is that the longer you fix, the better the returns. The best deals available right now are for fixes lasting three or five years.
Even if shorter-term bonds regain the advantage, as they have over the past couple of years, locking in a competitive rate now is still likely to earn you more over five years than switching to a new one-year bond annually – unless there's a major economic shock.
Consider compounding
Compounding can be a powerful way to grow your savings. It means that, as well as earning interest on your savings, you also earn interest on the interest itself. Therefore, every year that the money is in your account you're earning interest on each previous year's interest.
The key is to re-save both the initial deposit or balance you fixed and the interest earned on it, so you can maximise your earnings.
Keep track with a savings platform
If you're spreading your savings across multiple accounts, a savings platform could make life easier.
These platforms help you find competitive accounts and let you manage them with a single login. They also usually remind you when fixed-rate bonds are due to mature, so your money doesn't sit in a low-paying account.
However, savings platforms only work with selected banks and building societies, so you could miss a market-leading rate from a provider they don't list.
Also check for fees. Some platforms, such as Aviva Save and Raisin, are free, but others take a cut of the interest before displaying rates or charge a percentage of your savings.
- Find out more: how do savings platforms work?
