Average fixed bonds

• The average one-year fixed bond rate at 3.95% gross is now 0.02% higher than the average five-year fixed bond at 3.93%. The rate gap was 0.03% a month prior.
• In May 2025, the rate gap between the average one- and five-year bonds was 0.21%, as they sat at 4.12% and 3.91%, respectively.
• A year ago, the average one-year bond paid 4.24%, while the average five-year bond paid 3.79%, a rate gap of 0.45%.

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

“The top one-year bond has risen for the first time since July, however, it’s still a far cry from the highs of two years ago, when the best rates exceeded 6%. Savers who locked away £10,000 in the top two-year bond would now be enjoying over £1,000 in interest. This is compared to just £888 if they had an ‘average’ paying account. However, with many rates trending downwards or stagnating, savers risk seeing their real returns diminished, as under 500 fixed bonds can outpace inflation.

“If it is to be believed that inflation has peaked, this may not bode well for savers, as the chances of a base rate cut in December rise significantly. Understandably, savers may not be thrilled by the news of a base rate cut, but any hesitation to lock in their rates now could mean they miss out in real terms. Although it typically impacts variable rates in the first instance, it wouldn’t be surprising if providers factored this into their pricing for fixed rates.

“The latest Bank of England Money and Credit stats revealed that £5.8 billion was put into easy access accounts during September. This points to many savers adopting a ‘wait and see’ approach, and unwilling lock away their cash until after the Autumn Statement when more certainty is expected. However, depending on what changes, it’s not guaranteed that markets will react favourably, so it may be best to secure the market-leading rates now.”