Fixed rate bonds

A bond is simply put, a loan on which the issuer is the borrower.Bonds allow the issuer to raise capital to enable it to finance long-term investment.The interest rate is normally set for the entire duration of the loan.Fixed Rate Bonds will be impaired if the interest rate rises.

The interest rates banks and building societies are willing to pay to offer fixed-rate bonds tend to be higher than on the instant-access accounts.The main difference between the two products that investors must be willing to lock up their money for a certain period applies.If you're ready access to your money is very important, then a cash ISA you can offer a better interest rate and a better option than an ordinary current or savings account.And that all goes well, you become a year round smiling smugly in the knowledge that your money is one of the top rates available.On the minus side are, however, you must commit your money for at least a year.