Fixed-rate bonds explained
A fixed-rate bond guarantees a rate for a set term in exchange for locking your money away.
The trade-off
You typically can't withdraw before the term ends, so a bond suits money you won't need. In return you get a rate that's fixed regardless of what happens to the market.
At maturity
When the term ends, the money and interest are usually returned to a nominated account or rolled over — check the provider's maturity process so it doesn't default to a lower rate.
Common questions
- Can I access the money early?
- Usually not, or only with a significant interest penalty. Check the terms before committing.
- Is a longer term always better?
- Not necessarily — longer terms sometimes pay less if rates are expected to fall. Compare across terms.
Information only, not financial advice.