Probably answered a million times before, so my apologies. But does the 35k protection cover any interest payable on maturity of a fixed term deposit account. For example, I buy a 1-yr bond for £20k paying 7% on maturity, and the bank goes bust 6 months into the term, so my balance is still £20k. I lose the interest, right (£700)? If so, is it always better to opt for monthly interest rather than annual?

No, as far as I understand it you will still get the interest paid aslong as the original sum plus the interest is under the 35K limit - hence why people repeatedly point out that your capital sum should be under 35K in order to take into account any interest added.

From Tuesday the 35K will become 50K which is nice.