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Top short-term fixed bond savings rates on the rise

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
03/07/2024

Top short-term fixed bond savings rates on the rise

The top short-term fixed bond rates have fluctuated recently, with savings rates higher than longer-term offers. Moneyfactscompare.co.uk reveals the state of play in the fixed bond market for savers.

Top short-term fixed bond savings rates on the rise

The top short-term fixed bond rates have fluctuated recently, with savings rates higher than longer-term offers. Moneyfactscompare.co.uk reveals the state of play in the fixed bond market for savers.

  • The top one-year fixed bond at 5.25% gross is now 0.30% higher than the top five-year fixed bond of 4.95%, as of 1 July 2024. Month-on-month the top one-year fixed bond rate is higher.
  • In January 2024, the rate gap between the top one- and five-year bonds was 0.75%, as they sat at 5.50% and 4.75%, respectively.
  • A year ago, the top one-year bond paid 6.02%, with the average five-year bond paying 5.70%, a gap of 0.32%.
  • The top one-year fixed bond at 5.25% gross is now 0.30% higher than the top five-year fixed bond of 4.95%, as of 1 July 2024. Month-on-month the top one-year fixed bond rate is higher.
  • In January 2024, the rate gap between the top one- and five-year bonds was 0.75%, as they sat at 5.50% and 4.75%, respectively.
  • A year ago, the top one-year bond paid 6.02%, with the average five-year bond paying 5.70%, a gap of 0.32%.

 

Savings market analysis – top fixed bond rates

 

Jan-22

Jul-22

Jan-23

Jul-23

Jan-24

Jun-24

Jul-24

Top one-year fixed bond rate

1.41%

2.70%

4.33%

6.02%

5.50%

5.22%

5.25%

Top two-year fixed bond rate

1.60%

3.03%

4.68%

6.10%

5.25%

4.96%

5.13%

Top three-year fixed bond rate

1.85%

3.11%

4.76%

6.10%

5.35%

4.85%

4.85%

Top four-year fixed bond rate

1.92%

3.11%

4.55%

5.75%

4.60%

4.75%

4.60%

Top five-year fixed bond rate

2.14%

3.25%

4.75%

5.70%

4.75%

4.95%

4.95%

Top interest gross rates based on a £10,000 deposit as at the start of the month.

Source: Moneyfactscompare.co.uk

 

 

Savings market analysis – top fixed bond rates

 

Jan-22

Jul-22

Jan-23

Jul-23

Jan-24

Jun-24

Jul-24

Top one-year fixed bond rate

1.41%

2.70%

4.33%

6.02%

5.50%

5.22%

5.25%

Top two-year fixed bond rate

1.60%

3.03%

4.68%

6.10%

5.25%

4.96%

5.13%

Top three-year fixed bond rate

1.85%

3.11%

4.76%

6.10%

5.35%

4.85%

4.85%

Top four-year fixed bond rate

1.92%

3.11%

4.55%

5.75%

4.60%

4.75%

4.60%

Top five-year fixed bond rate

2.14%

3.25%

4.75%

5.70%

4.75%

4.95%

4.95%

Top interest gross rates based on a £10,000 deposit as at the start of the month.

Source: Moneyfactscompare.co.uk

 

Moneyfacts top fixed bond rates

 

Moneyfacts top fixed bond rates

 

  • The average one-year fixed bond at 4.64% gross is now 0.66% higher than the top five-year fixed bond of 3.98%, as of 1 July 2024.
  • In January 2024, the rate gap between the average one- and five-year bonds was 0.67%, as they sat at 4.87% and 4.20%, respectively.
  • A year ago, the average one-year bond paid 4.80%, with the average five-year bond paying 4.44%, a gap of 0.36%.
  • The average one-year fixed bond at 4.64% gross is now 0.66% higher than the top five-year fixed bond of 3.98%, as of 1 July 2024.
  • In January 2024, the rate gap between the average one- and five-year bonds was 0.67%, as they sat at 4.87% and 4.20%, respectively.
  • A year ago, the average one-year bond paid 4.80%, with the average five-year bond paying 4.44%, a gap of 0.36%.

 

Savings market analysis – average fixed bond rates

 

Jan-22

Jul-22

Jan-23

Jul-23

Jan-24

Jun-24

Jul-24

Average one-year fixed bond rate

0.82%

1.80%

3.56%

4.80%

4.87%

4.58%

4.64%

Average two-year fixed bond rate

0.93%

2.03%

3.83%

4.77%

4.68%

4.30%

4.32%

Average three-year fixed bond rate

1.18%

2.24%

3.84%

4.69%

4.46%

4.13%

4.18%

Average four-year fixed bond rate

1.40%

2.55%

3.85%

4.46%

4.31%

3.94%

3.93%

Average five-year fixed bond rate

1.47%

2.52%

4.02%

4.44%

4.20%

3.95%

3.98%

Average interest gross rates based on a £10,000 deposit as at the start of the month.

Source: Moneyfactscompare.co.uk

 

 

Savings market analysis – average fixed bond rates

 

Jan-22

Jul-22

Jan-23

Jul-23

Jan-24

Jun-24

Jul-24

Average one-year fixed bond rate

0.82%

1.80%

3.56%

4.80%

4.87%

4.58%

4.64%

Average two-year fixed bond rate

0.93%

2.03%

3.83%

4.77%

4.68%

4.30%

4.32%

Average three-year fixed bond rate

1.18%

2.24%

3.84%

4.69%

4.46%

4.13%

4.18%

Average four-year fixed bond rate

1.40%

2.55%

3.85%

4.46%

4.31%

3.94%

3.93%

Average five-year fixed bond rate

1.47%

2.52%

4.02%

4.44%

4.20%

3.95%

3.98%

Average interest gross rates based on a £10,000 deposit as at the start of the month.

Source: Moneyfactscompare.co.uk

 

Moneyfacts average fixed bond rates

 

Moneyfacts average fixed bond rates

 

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“The rise and falls of fixed bond rates have been evident over the past couple of years, making it a challenging environment for savers unsure whether to lock their cash into a deal or for how long. The top rates are largely offered by challenger banks who strive to draw in deposits to fund their future lending. Such competition and brand variety makes it an interesting space for consumers comparing deals, but this also means savers need to be quick off the mark to secure a top rate before institutions meet their deposit targets. However, just because the top rates move, does not necessarily mean the whole market is moving in a similar trajectory, so savers need to compare deals carefully.

“Since the start of 2024, the top fixed bond rates have come down, and are significantly lower than they were a year ago, but this should not deter savers from taking advantage of the rates currently available. There are expectations for interest rates to fall in the coming months and that could impact fixed bond rates, so securing a deal now may be wise. Month-on-month the top one- and two-year fixed bond rates are up, while longer-term versions have remained steady. The top one-year fixed bond currently pays 0.30% more than the top five-year bond, however, there may be more appetite to secure a longer-term deal now than at the start of the year when the top five-year bond paid 0.75% less than the top one-year bond.

“Fixed rate bonds are an ideal choice for savers looking for a guaranteed a return on their investment, whether that be for a year or more. However, not every saver may be prepared to lock away their cash over the longer-term. It will be interesting to see how rates will fluctuate in the coming months.”

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“The rise and falls of fixed bond rates have been evident over the past couple of years, making it a challenging environment for savers unsure whether to lock their cash into a deal or for how long. The top rates are largely offered by challenger banks who strive to draw in deposits to fund their future lending. Such competition and brand variety makes it an interesting space for consumers comparing deals, but this also means savers need to be quick off the mark to secure a top rate before institutions meet their deposit targets. However, just because the top rates move, does not necessarily mean the whole market is moving in a similar trajectory, so savers need to compare deals carefully.

“Since the start of 2024, the top fixed bond rates have come down, and are significantly lower than they were a year ago, but this should not deter savers from taking advantage of the rates currently available. There are expectations for interest rates to fall in the coming months and that could impact fixed bond rates, so securing a deal now may be wise. Month-on-month the top one- and two-year fixed bond rates are up, while longer-term versions have remained steady. The top one-year fixed bond currently pays 0.30% more than the top five-year bond, however, there may be more appetite to secure a longer-term deal now than at the start of the year when the top five-year bond paid 0.75% less than the top one-year bond.

“Fixed rate bonds are an ideal choice for savers looking for a guaranteed a return on their investment, whether that be for a year or more. However, not every saver may be prepared to lock away their cash over the longer-term. It will be interesting to see how rates will fluctuate in the coming months.”

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Apprentice Press & PR Assistant