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Fixed bond and ISA average rates see significant cuts

Image of a Moneyfacts Savings Treasury Report Image of a Moneyfacts Savings Treasury Report Image of a Moneyfacts Savings Treasury Report
Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
22/01/2024

Fixed bond and ISA average rates see significant cuts

Fixed bond and ISA average rates see significant cuts

Moneyfacts UK Savings Trends Treasury Report data shows average savings rates fell across the spectrum month-on-month. Fixed rate bonds and ISA average rates had the biggest month-on-month rate cuts recorded in almost 15 years.

 

Moneyfacts UK Savings Trends Treasury Report data shows average savings rates fell across the spectrum month-on-month. Fixed rate bonds and ISA average rates had the biggest month-on-month rate cuts recorded in almost 15 years.

 

  • The average easy access rate fell for a consecutive month to 3.15%. The average notice rate fell to 4.38%, the first month-on-month fall since February 2022.
  • The average easy access ISA rate fell month-on-month to 3.25%. The average notice ISA rate fell to 4.18%.
  • The average one-year fixed bond fell for a third consecutive month to 4.87%, the first time it has dipped below 5% since July 2023, and the biggest month-on-month fall since February 2009. The average longer-term fixed bond fell for a fourth consecutive month to 4.46%, seeing its biggest month-on-month fall since February 2009.
  • The average one-year fixed ISA fell for a consecutive month to 4.72%, the biggest month-on-month fall since March 2009. The average longer-term fixed ISA rate fell for a consecutive month to 4.32%, seeing its biggest month-on-month fall since March 2009.
  • Product choice overall fell month-on-month to 1,799 savings deals (including ISAs).

 

  • The average easy access rate fell for a consecutive month to 3.15%. The average notice rate fell to 4.38%, the first month-on-month fall since February 2022.
  • The average easy access ISA rate fell month-on-month to 3.25%. The average notice ISA rate fell to 4.18%.
  • The average one-year fixed bond fell for a third consecutive month to 4.87%, the first time it has dipped below 5% since July 2023, and the biggest month-on-month fall since February 2009. The average longer-term fixed bond fell for a fourth consecutive month to 4.46%, seeing its biggest month-on-month fall since February 2009.
  • The average one-year fixed ISA fell for a consecutive month to 4.72%, the biggest month-on-month fall since March 2009. The average longer-term fixed ISA rate fell for a consecutive month to 4.32%, seeing its biggest month-on-month fall since March 2009.
  • Product choice overall fell month-on-month to 1,799 savings deals (including ISAs).

 

Savings market analysis – average rates

 

Jan-22 Jan-23 Dec-23 Jan-24

Average easy access rate

0.20%

1.56%

3.17%

3.15%

Average easy access ISA rate

0.26%

1.66%

3.31%

3.25%

Average notice rate

0.57%

2.38%

4.43%

4.38%

Average notice ISA rate

0.37%

2.36%

4.22%

4.18%

Average one-year fixed rate bond

0.80%

3.51%

5.13%

4.87%

Average longer-term fixed rate bond*

1.16%

3.85%

4.76%

4.46%

Average one-year fixed rate ISA

0.57%

3.34%

4.99%

4.72%

Average longer-term fixed rate ISA*

0.97%

3.63%

4.65%

4.32%

*Longer-term fixed bonds or ISAs are those with terms over 550 days. Average interest rates based on a £5,000 deposit as at the start of the month.

Source: Moneyfacts Treasury Reports

 

Savings market analysis – product count

 

Jan-22

Jan-23

Dec-23

Jan-24

Number of live savings account options (excluding ISAs)

1,252

1,266

1,415

1,342

Number of live ISA options

388

429

503

457

Source: Moneyfacts Treasury Reports

 

 

Savings market analysis – average rates

 

Jan-22 Jan-23 Dec-23 Jan-24

Average easy access rate

0.20%

1.56%

3.17%

3.15%

Average easy access ISA rate

0.26%

1.66%

3.31%

3.25%

Average notice rate

0.57%

2.38%

4.43%

4.38%

Average notice ISA rate

0.37%

2.36%

4.22%

4.18%

Average one-year fixed rate bond

0.80%

3.51%

5.13%

4.87%

Average longer-term fixed rate bond*

1.16%

3.85%

4.76%

4.46%

Average one-year fixed rate ISA

0.57%

3.34%

4.99%

4.72%

Average longer-term fixed rate ISA*

0.97%

3.63%

4.65%

4.32%

*Longer-term fixed bonds or ISAs are those with terms over 550 days. Average interest rates based on a £5,000 deposit as at the start of the month.

Source: Moneyfacts Treasury Reports

 

Savings market analysis – product count

 

Jan-22

Jan-23

Dec-23

Jan-24

Number of live savings account options (excluding ISAs)

1,252

1,266

1,415

1,342

Number of live ISA options

388

429

503

457

Source: Moneyfacts Treasury Reports

 

 

Rachel Springall, Finance Expert at Moneyfacts, said:

“The significant cuts seen across fixed rate bond and fixed ISA rates month-on-month are the biggest recorded in almost 15 years. This will no doubt come as a shock for savers who use these accounts to earn a guaranteed return on their hard-earned cash and have waited a couple of months to invest. However, despite these falls, it is worth noting that average rates are higher than they were at the start of 2023, so many coming off a fixed rate will find better returns today if they want to lock into a deal of a similar term. Longer-term fixed rates are currently returning less than one-year options on average, but with interest rates expected to fall this year, some savers may decide to fix for longer.

“Savers who prefer to keep their cash closer to hand will find easy access variable rates are much higher now than they were a year ago, but returns have dipped slightly month-on-month. Savings providers will no doubt be aware of the ongoing murmurings of the Bank of England base rate coming down in 2024, but even if this doesn’t occur for the next few months, variable rates can still change. Providers will be looking closely both at their interest margins, the swap market, and their own position in the top rate tables against their peers. Swift movement can take place if they are sitting way ahead of their competition or if they are drawing in too much in deposits.

“Product choice has taken a hit month-on-month, but this should not deter savers from shopping around. As we start a new year it is the perfect time for savers to review their existing pots and switch if they are not being paid a good return for their loyalty. A new ISA season should also bring a flurry of activity from providers and, due to the interest rate rises of 2023 and upcoming ISA reforms, they may be in more demand from savers who are close to breaching their Personal Savings Allowance (PSA). Savers will need to consider all the different account options available to them to suit their short or long-term goals and move swiftly to take advantage of the top rates.”

Rachel Springall, Finance Expert at Moneyfacts, said:

“The significant cuts seen across fixed rate bond and fixed ISA rates month-on-month are the biggest recorded in almost 15 years. This will no doubt come as a shock for savers who use these accounts to earn a guaranteed return on their hard-earned cash and have waited a couple of months to invest. However, despite these falls, it is worth noting that average rates are higher than they were at the start of 2023, so many coming off a fixed rate will find better returns today if they want to lock into a deal of a similar term. Longer-term fixed rates are currently returning less than one-year options on average, but with interest rates expected to fall this year, some savers may decide to fix for longer.

“Savers who prefer to keep their cash closer to hand will find easy access variable rates are much higher now than they were a year ago, but returns have dipped slightly month-on-month. Savings providers will no doubt be aware of the ongoing murmurings of the Bank of England base rate coming down in 2024, but even if this doesn’t occur for the next few months, variable rates can still change. Providers will be looking closely both at their interest margins, the swap market, and their own position in the top rate tables against their peers. Swift movement can take place if they are sitting way ahead of their competition or if they are drawing in too much in deposits.

“Product choice has taken a hit month-on-month, but this should not deter savers from shopping around. As we start a new year it is the perfect time for savers to review their existing pots and switch if they are not being paid a good return for their loyalty. A new ISA season should also bring a flurry of activity from providers and, due to the interest rate rises of 2023 and upcoming ISA reforms, they may be in more demand from savers who are close to breaching their Personal Savings Allowance (PSA). Savers will need to consider all the different account options available to them to suit their short or long-term goals and move swiftly to take advantage of the top rates.”

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.

Moneyfacts is the UK's leading independent provider of finance product data. For over 35 years Moneyfacts' information has been a key driver behind personal finance product decisions.

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.

Moneyfacts is the UK's leading independent provider of finance product data. For over 35 years Moneyfacts' information has been a key driver behind personal finance product decisions.

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