Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said:
“It is crucial savers keep on top of the changing market and make the switch to ensure they are not getting a raw deal, especially as we have seen some of the top rate deals drop below 5%. It would not be too surprising to see more providers adjusting their rates in reaction.
“Since the previous inflation announcement, fixed rates have faced further reductions, so it may be wise for savers to begin considering locking into an interest rate while the majority continue to pay competitive returns. Longer-term rates have suffered the most, seeing drops as large as 0.31% for a five-year term month-on-month. Although, typically, base rate cuts usually impact variable rates, we have been seeing an increasing number of providers lowering rates on accounts offering fixed returns. Shorter-term savers are continuing to be incentivised with higher top rates, however, they have been experiencing some drops; the previous market-leading non-isa one-year bond lasted a couple of weeks, so it is imperative savers act quickly. For now, top-rate variable accounts have seen little volatility since the previous inflation announcement, but it remains to be seen how long this lasts.
“One area of the market to see improvements has been the returns offered on ISAs, longer-term rates have thrived with new market-leading rates across the board. Savers who are open to locking away their cash for a five-year term can now receive the same return on their ISA as its five-year bond counterpart. However, the best notice accounts have seen a dip in top rates month-on-month and now pay below 5%, which may be bad news for consumers looking to maximise their tax-free savings. This may not be wholly unexpected, and it would be sensible to expect more reductions to variable rate products alongside the Bank of England’s decision to drop interest rates at the beginning of the month.
“Predictions suggest that inflation may begin to slowly tick up again in the coming months as high energy and food prices fall out of the index and as service inflation continues to be a core issue. During this time, it is crucial that savers do not grow complacent with their pots and switch accounts when attractive deals appear to ensure that inflation does not erode their cash.”
*Data note: Please note that these savings product numbers include deals that are available to UK residents (easy access accounts, notice accounts, fixed rate bonds, variable Cash ISAs and fixed Cash ISAs) and exclude regular savers, children’s savers, variable rate fixed term bonds or ISAs, JISAs and LISAs, based on a £10,000 deposit, gross rates. Higher rates may be available for other levels of deposit.
Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said:
“It is crucial savers keep on top of the changing market and make the switch to ensure they are not getting a raw deal, especially as we have seen some of the top rate deals drop below 5%. It would not be too surprising to see more providers adjusting their rates in reaction.
“Since the previous inflation announcement, fixed rates have faced further reductions, so it may be wise for savers to begin considering locking into an interest rate while the majority continue to pay competitive returns. Longer-term rates have suffered the most, seeing drops as large as 0.31% for a five-year term month-on-month. Although, typically, base rate cuts usually impact variable rates, we have been seeing an increasing number of providers lowering rates on accounts offering fixed returns. Shorter-term savers are continuing to be incentivised with higher top rates, however, they have been experiencing some drops; the previous market-leading non-isa one-year bond lasted a couple of weeks, so it is imperative savers act quickly. For now, top-rate variable accounts have seen little volatility since the previous inflation announcement, but it remains to be seen how long this lasts.
“One area of the market to see improvements has been the returns offered on ISAs, longer-term rates have thrived with new market-leading rates across the board. Savers who are open to locking away their cash for a five-year term can now receive the same return on their ISA as its five-year bond counterpart. However, the best notice accounts have seen a dip in top rates month-on-month and now pay below 5%, which may be bad news for consumers looking to maximise their tax-free savings. This may not be wholly unexpected, and it would be sensible to expect more reductions to variable rate products alongside the Bank of England’s decision to drop interest rates at the beginning of the month.
“Predictions suggest that inflation may begin to slowly tick up again in the coming months as high energy and food prices fall out of the index and as service inflation continues to be a core issue. During this time, it is crucial that savers do not grow complacent with their pots and switch accounts when attractive deals appear to ensure that inflation does not erode their cash.”
*Data note: Please note that these savings product numbers include deals that are available to UK residents (easy access accounts, notice accounts, fixed rate bonds, variable Cash ISAs and fixed Cash ISAs) and exclude regular savers, children’s savers, variable rate fixed term bonds or ISAs, JISAs and LISAs, based on a £10,000 deposit, gross rates. Higher rates may be available for other levels of deposit.
