Why Short-Term Deposits Are A Solution For Investing Customers

Everyone is looking for ways to make sure their money goes just that little bit further. Many banks offer easy saver accounts, allowing you to earn interest on your money and withdraw at any time. But what about that chunk of money you have lying around doing nothing? That’s where a fixed term deposit comes in. You put that money with a bank for a set period, and you get a better rate in return. But most UK banks lock term deposits behind hefty minimum deposits, 1-year minimum terms, or even cap deposits at a certain amount. HSBC, for example, demands a minimum of £2000 to even open a fixed term deposit. Other accounts like Barclays, Lloyds, and Santander have a lower barrier to entry, but even they demand a £500 deposit and a minimum 1-year term. This means that in most banks, any amount under £500 is stuck in either an easy saver earning minimal interest, or in a current account, likely earning nothing.  

Why don’t banks offer better deals on fixed term deposits 

1.  Big banks have no real incentive to offer better terms 

Many big high street banks already have established customer bases. The FCA's 2023 review found that most customers simply do not switch their current account. Passive loyalty is still loyalty, and high street banks hold an advantage due to their size. Paying minimal amounts in term deposit interest to keep a stable source of funding for their lending branches is great for them, as their customers usually can’t be bothered to switch. You win a little, but the bank wins more. 

2.  They do–but only for big investments. 

There are many great rates out there. Many banks offer rates around 4.50% annually through savings platforms, however, MoneySuperMarket data from July 2026 illustrate that many of these banks demand high minimum deposits, some going as high as a £10,000 minimum. These banks also demand that money be locked up for the same period as many of the well-known high street banks, meaning that to access these rates, you need to have large amounts of cash lying around, and be willing to not see it for a year, minimum.  

How the High Street Banks Stack Up 

Here’s some insight into how the biggest UK banks offer their term deposits, as of July 2026: 

Sources: iFASTGB Fixed Term Deposits, Barclays: Compare fixed-rate savings bonds, Fixed rate savings accounts and ISAs | Lloyds, Fixed Rate Bonds | Fixed Rate Savings Account - HSBC UK, Fixed Term Savings Account | Fixed Rate Bond | NatWest, Compare savings accounts and ISA rates | Nationwide, Fixed Term Savr | Santander. Rates are indicative and subject to change. Always verify directly with the provider. 
*Disclaimer: Rates are true as of 12th August 2026. iFAST Global Bank Fixed Term Deposits have a fixed term. Early withdrawal is generally not permitted and may result in loss of accrued interest. A 14-day cooling-off period applies. T&Cs apply. 
https://www.ifastgb.com/en/deposit/fixed-term-deposit 

Looking at the facts 

The next best competitor only offers a 4.00% AER while also having a minimum deposit of £1—but still comes with a 1-year deposit period. That means your money is locked up for a year at a time, and you can’t save in short bursts. Your money is less liquid, bound by a 365-day opportunity cost. This is where iFAST makes the difference. With an iFAST Global Bank Fixed Term Deposit, you can make much shorter fixed term deposits, for 1 month, 3 month, and 6-month periods. These short-term deposits allow you to earn at a rate like high street banks, but with greater liquidity, allowing you to invest chunks of money that would otherwise require being kept free. Please remember that despite the shorter terms, all iFAST term deposits will be locked in for the chosen term and cannot be unlocked or otherwise terminated early. 

Any spare cash not needed for daily use is a massive beneficiary of short-term Fixed Term Deposits. iFAST also offers 4.20% AER on a 1-year plan, meaning that as of July 2026, iFAST rates beat out the most popular banks even on their own turf—all while offering a minimum deposit of only £1 on all Fixed Term Deposits. As a bonus, iFAST allows you to make Fixed Term Deposits in multiple currencies, all at highly competitive rates. 

Sources: The most popular consumer banks & financial service providers in the UK 2026 | Economy | YouGov Ratings  iFASTGB Fixed Term Deposits, Barclays: Compare fixed-rate savings bonds, Fixed Term Savings Account | Fixed Rate Bond | NatWest, Compare savings accounts and ISA rates | Nationwide, Fixed Term Savr | Santander,Compare fixed-term savings accounts | Halifax. Rates are indicative and subject to change. Always verify directly with the provider. 

Disclaimer: Rates are true as of 28th July 2026. iFAST Global Bank Fixed Term Deposits have a fixed term. Early withdrawal is generally not permitted and may result in loss of accrued interest. A 14-day cooling-off period applies. T&Cs apply. 
https://www.ifastgb.com/en/deposit/fixed-term-deposit 

In a nutshell 

Term deposits are exceptionally valuable for consumers looking to grow their wealth at a greater rate, but the largest banks are offering inflexible periods and lower interest rates, and relying on consumers’ lack of willingness to switch. 

The solution is simple: Choose a bank that allows you to deposit more flexibly, and with competitive interest rates. Your money works harder, on your own timeline. 

Visit www.ifastgb.com to create a time deposit account earning up to 4.30% AER* today. 

*Disclaimer: Rates are true as of 28th July 2026. iFAST Global Bank Fixed Term Deposits have a fixed term. Early withdrawal is generally not permitted and may result in loss of accrued interest. A 14-day cooling-off period applies. T&Cs apply. 
https://www.ifastgb.com/en/deposit/fixed-term-deposit