• The average one-year fixed bond at 4.24% gross is now 0.45% higher than the top five-year fixed bond at 3.79%. The rate gap was 0.49% a month prior.
• In May 2024, the rate gap between the average one- and five-year bonds was 0.65%, as they sat at 4.58% and 3.93%, respectively.
• A year ago, the average one-year bond paid 5.36%, with the average five-year bond paying 4.73%, a gap of 0.63%.

Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said:

“Despite a short but welcome return during October, fixed rate bonds paying 5% or above have yet again disappeared from the market. With the Bank of England moving to reduce base rate, it is possible that this decision will impact providers’ pricing strategies, so it is unlikely that we will see them make a comeback. However, savers who are more open to lesser-known brands, such as challenger banks, will find that typically they offer higher rates of interest. Consumers would be wise to act with haste if they spot an attractive deal, as they may have a shorter shelf-life.

“Savers expecting their one-year fixed bond to mature soon can expect 1.20% lower returns than the market-leader for November 2023, meaning that they will be significantly worse off in real terms. Month-on-month most top rates stagnated, showcasing diminishing competition, but one- and two-year bonds have bucked this trend seeing drops of up to 0.10%. To avoid cuts further eroding deposits, it would be wise for savers to lock into a competitive rate, and it may be worthwhile considering securing their cash for longer to reap the most benefits of higher-paying rates. Almost all average rates have fallen over the past month, the exception being a four-year bond.”