Choosing where to save your money isn’t always straightforward. If you're comparing a Fixed Rate Bond and a Fixed Rate Cash ISA, it's normal to feel unsure, they can sound very similar at first.
This guide explains how our Fixed Rate Bonds and Fixed Rate Cash ISAs work, so you can understand the key differences and decide what feels right for you.
Who each option may suit
Both options offer a fixed interest rate for a set period, but they're typically used in slightly different ways.
A Fixed Rate Cash ISA may suit you if:
- You want to keep your interest tax-free
- You still have some of your annual ISA allowance available
- You'd prefer not to think about tax on your savings.
Read our article on Cash ISAs - Cash ISAs: How they work and what's changing in April 2027
A Fixed Rate Bond may suit you if:
- You're happy to save outside of an ISA
- You don't need to use your ISA allowance (or have already used it)
- You're comfortable that your interest may be taxed, depending on your situation.
How do the two compare?
The information below explains how our Fixed Rate Cash ISAs and Fixed Rate Bonds work. Features may vary between providers, so it's important to check the details of any account you're considering.
How is interest paid?
Both accounts offer a fixed interest rate, so the rate won't change during the term.
Fixed Rate Cash ISA
Interest is calculated daily and added to your balance (compounded). It's paid into your ISA annually and at maturity.
Fixed Rate Bond
Interest is calculated daily but not added to your balance (not compounded). It's paid annually and at maturity into your nominated bank account. You can choose to reinvest the final interest payment as part of your maturity instruction.
Tax on interest
This is one of the key differences.
Fixed Rate Cash ISA
Any interest you earn is tax-free.
Fixed Rate Bond
Interest is paid gross, which means it may be taxable. Your tax benefits depend on your personal situation and may change in the future.
Access to your money
Both options are designed for customers who are happy to leave their money untouched for the full term.
- Fixed Rate Cash ISA
- Partial withdrawals aren't allowed
- You have a 14 calendar day cooling off period to close of transfer your ISA without charge (you won't receive any interest if you do this)
- After this an interest charge will apply if you close or transfer your ISA (see Terms and Conditions).
- Fixed Rate Bond
- You can't withdraw or close the account early during the fixed term.
What happens at the end of the term?
As your account approaches maturity, we'll contact you with your options.
Fixed Rate Cash ISA
If no instructions are received, your money will be moved to a Cash ISA Maturity Account which offers a lower rate of interest.
Fixed Rate Bond
If no instructions are received, your money (including the final payment of interest) will be moved to an Easy Access Holding Account also offering a lower rate of interest.
In both cases, you can then move the money into a new Close Brothers Savings account, or withdraw the money to your nominated bank account.
Final thought
There’s no one‑size‑fits‑all approach to saving. By understanding how our Fixed Rate Cash ISAs and Fixed Rate Bonds work, you can choose the option that best fits your needs and preferences.
