Should I Tie up my Savings?

Many of us have some savings and it can often be difficult to know what to do with them. With interest rates so low, it is easy to think that we should do everything we can to make more from our savings. However, in order to get higher rates it is likely that we will need to tie our money up. This could mean in a notice account or in a bond where the money has to stay in for years. It is worth considering whether this is a good idea.


  • By putting your money into an account where you do not get instant access, you will get a higher interest rate. This rate could be more than twice and in some cases ten times more than you get in an instant access account which means that it is well worth considering.
  • Getting higher interest could encourage you to save more and build up your savings pot even higher. You could think that it is more worthwhile saving rather than spending if you are building up a decent sum of money that will earn you a good bit of interest in exchange for your efforts.
  • When the money is tied up you will not be able to get hold of it and spend it. This means that it takes away the temptation of having the money there, easily able to access and spend. If you are the type of person that does get tempted to spend money when you know that it is there, then it can be a good idea to tie it up somewhere where spending it is not an option.
  • If you have a savings goal, perhaps you are saving up towards something specific or you want a certain sum to fall back on if you need to, then tying up the money can help. Not only will the higher interest mean that you get more of a sum in the account, but you will also be able to more easily reach the goal as you will not be able to take money out of the account.


  • Once the money is in this sort of account, you will not be able to easily get it out or not be able to get it out at all. This means that you could have a problem if you need the money really quickly and you just cannot get hold of it. This means that it would be wise to keep some money in an instant access account so that you have got some to use in an emergency.
  • If you tie your money up in a fixed rate bond then you will have a fixed interest rate for the whole term of the bond. It could be a year or perhaps up to five years. If it is a long period of time, then the base rate may have gone up and there might be other savings account which have better interest rates. You will not be able to move your money to an account with a better rate and you may wish that you were able to do this.

Whether tying your money up is a good idea will depend on your situation and whether you want to take a risk with the interest rates. Often a fixed rate savings account will be a favourable rate so it is probably unlikely to fall below the base rate, but more competitive products may appear with better rates. You will have to decide whether you are happy to take this risk bearing in mind that if you keep waiting to see if a better rate is coming you may just never put your money into this sort of account at all.

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