What is term deposit called in the UK?
A term deposit is a placement of money for a certain period at a fixed interest rate. In the United Kingdom, a term deposit is commonly called a "fixed-term deposit".
What are short-term deposits?
Short-term deposits in the UK are savings products that offer a fixed interest rate over a relatively short period, typically ranging from a few months to a couple of years. They are ideal for savers who want to earn a return on their money while maintaining a relatively short commitment period. Here’s a breakdown of short-term deposits:
- Fixed-Rate Bonds. These are savings accounts where you deposit a lump sum for a fixed term, typically ranging from 3 months to 2 years.
- Notice Accounts. These accounts require you to give notice (e.g., 30, 60, or 90 days) before you can access your funds. Often higher than instant-access savings accounts but lower than fixed-rate bonds. You can withdraw your money after giving the required notice, which provides more flexibility compared to fixed-term deposits.
- High-Interest Savings Accounts. These are savings accounts that offer higher interest rates than standard savings accounts. Generally, you can access your funds at any time, but there may be conditions to earn the advertised rate, such as maintaining a minimum balance.
- Cash ISAs. Tax-efficient savings accounts where interest earned is tax-free. Fixed or variable rates depending on the type of Cash ISA. Short-term Cash ISAs may offer fixed terms similar to fixed-rate bonds.
- Short-Term Certificates of Deposit (CDs). Similar to fixed-rate bonds, but issued by banks or financial institutions and typically offer fixed returns over a set period. Fixed and often higher than standard savings accounts.Funds are locked in for the term, with penalties for early withdrawal.
Calculate future income on a 1-year term deposit (example):
| Amount, $ | Rate, % | Accrued %, $ |
| 25,000 | 4.20% | 1,050 |
| 25,000 | 4.25% | 1,063 |
| 25,000 | 4.30% | 1,075 |
| 50,000 | 4.70% | 2,350 |
| 50,000 | 4.75% | 2,375 |
| 50,000 | 4.80% | 2,400 |
| 100,000 | 5.20% | 5,200 |
| 100,000 | 5.25% | 5,250 |
| 100,000 | 5.30% | 5,300 |
| 200,000 | 4.70% | 9,400 |
| 200,000 | 4.75% | 9,500 |
| 200,000 | 4.80% | 9,600 |
What is the interest rate for fixed deposits in the UK?
Interest rates on a fixed deposit depend on the bank, the amount, and the duration of the deposit (long or short term deposots). As a rule, interest rates on fixed deposits in the UK depend on the Bank of England base rate and market conditions.
The rates on fixed deposits change regularly, so to find out the current rate, click the "More" button opposite the deposit program.
Before making a decision to place funds on a time deposit, we recommend that you carefully familiarize yourself with the terms of the deposit program, take into account the risks and potential profits. Please note that most banks and financial institutions offer the possibility to apply for the best term deposit online, which is very convenient for customers.
