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Fixed bond rate volatility calms after relentless cuts

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
18/03/2024

Fixed bond rate volatility calms after relentless cuts

Fixed bond rate volatility calms after relentless cuts

Moneyfacts UK Savings Trends Treasury Report data shows the sizeable fixed bond rate cuts over recent months have calmed, with the average longer-term fixed bond rate rising after five months of consecutive cuts.

 

Moneyfacts UK Savings Trends Treasury Report data shows the sizeable fixed bond rate cuts over recent months have calmed, with the average longer-term fixed bond rate rising after five months of consecutive cuts.

 

  • The average easy access rate rose to 3.18%. The average notice rate fell to 4.27%.
  • The average easy access ISA rate rose month-on-month to 3.32%, standing at its highest point in more than 15 years (December 2008 – 3.74%). The average notice ISA rate fell to 4.12%.
  • The average one-year fixed bond fell for a fifth consecutive month to 4.61%, standing at its lowest point since June 2023 (4.21%). The average longer-term fixed bond rose to 4.13%, after five months of back-to-back cuts. The difference in rate between the average one-year and longer-term fixed bond stands at 0.48%, with the one-year bond paying a higher average return.
  • The average one-year fixed ISA fell for a fifth consecutive month to 4.49%, standing at its lowest point since July 2023 (4.46%). The average longer-term fixed ISA rate remained unchanged, standing at its lowest point since June 2023 (4.01%).
  • Product choice overall rose month-on-month to 1,923 savings deals (including ISAs), the choice of Cash ISAs rose to 517 deals. The number of savings providers rose to 141, the highest count on Moneyfacts electronic records (starting February 2007).

 

  • The average easy access rate rose to 3.18%. The average notice rate fell to 4.27%.
  • The average easy access ISA rate rose month-on-month to 3.32%, standing at its highest point in more than 15 years (December 2008 – 3.74%). The average notice ISA rate fell to 4.12%.
  • The average one-year fixed bond fell for a fifth consecutive month to 4.61%, standing at its lowest point since June 2023 (4.21%). The average longer-term fixed bond rose to 4.13%, after five months of back-to-back cuts. The difference in rate between the average one-year and longer-term fixed bond stands at 0.48%, with the one-year bond paying a higher average return.
  • The average one-year fixed ISA fell for a fifth consecutive month to 4.49%, standing at its lowest point since July 2023 (4.46%). The average longer-term fixed ISA rate remained unchanged, standing at its lowest point since June 2023 (4.01%).
  • Product choice overall rose month-on-month to 1,923 savings deals (including ISAs), the choice of Cash ISAs rose to 517 deals. The number of savings providers rose to 141, the highest count on Moneyfacts electronic records (starting February 2007).

 

Savings market analysis – average rates

 

Mar-22 Mar-23 Feb-24 Mar-24

Average easy access rate

0.25%

1.85%

3.17%

3.18%

Average easy access ISA rate

0.30%

2.01%

3.30%

3.32%

Average notice rate

0.56%

2.61%

4.28%

4.27%

Average notice ISA rate

0.38%

2.64%

4.13%

4.12%

Average one-year fixed rate bond

0.89%

3.65%

4.62%

4.61%

Average longer-term fixed rate bond*

1.31%

3.86%

4.12%

4.13%

Average one-year fixed rate ISA

0.72%

3.56%

4.51%

4.49%

Average longer-term fixed rate ISA*

1.12%

3.72%

4.08%

4.08%

*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

 

Mar-22

Mar-23

Feb-24

Mar-24

Number of live savings account options (excluding ISAs)

 1,255

1,310

1,359

1,406

Number of live ISA options

399

433

500

517

Source: Moneyfacts Treasury Reports

 

 

Savings market analysis – average rates

 

Mar-22 Mar-23 Feb-24 Mar-24

Average easy access rate

0.25%

1.85%

3.17%

3.18%

Average easy access ISA rate

0.30%

2.01%

3.30%

3.32%

Average notice rate

0.56%

2.61%

4.28%

4.27%

Average notice ISA rate

0.38%

2.64%

4.13%

4.12%

Average one-year fixed rate bond

0.89%

3.65%

4.62%

4.61%

Average longer-term fixed rate bond*

1.31%

3.86%

4.12%

4.13%

Average one-year fixed rate ISA

0.72%

3.56%

4.51%

4.49%

Average longer-term fixed rate ISA*

1.12%

3.72%

4.08%

4.08%

*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

 

Mar-22

Mar-23

Feb-24

Mar-24

Number of live savings account options (excluding ISAs)

 1,255

1,310

1,359

1,406

Number of live ISA options

399

433

500

517

Source: Moneyfacts Treasury Reports

 

 

Rachel Springall, Finance Expert at Moneyfacts, said:

“Savers may be pleased to see the sizeable rate cuts to fixed bonds felt in recent months calmed during February. Month-on-month, the average rate on a one-year fixed bond fell by a marginal 0.01%, a far smaller cut than the 0.25% recorded a month prior. On longer-term bonds, the average rate rose by 0.01% after back-to-back months of relentless rate cuts. This is a positive turn of events for the fixed rate bond market, as between the start of 2024 and the start of February, the average longer-term bond fixed rate fell by a significant 0.34%, the biggest monthly drop recorded in 15 years. However, the swap rate market remains volatile, and providers will also have their own reasons to enhance or worsen their fixed rates; such moves during February resulted in a drop to the average shelf-life of a fixed rate bond to 27 days, from 39 days.

“Cash ISA rates showed a mixed bag of changes month-on-month. The average easy access ISA rate rose to its highest point in more than 15 years, but the average notice ISA rate fell. The average one-year fixed ISA rate fell by 0.02% and the longer-term ISA remained unchanged. Savers only have a couple of weeks left until the current tax-year ends, so providers are working hard to attract their deposits but will need to manage their market position carefully. The new ISA reforms will come into effect from 6 April and could encourage consumers to use Cash ISAs more. However, regardless of these reforms, savers would be wise to take advantage of both their ISA allowance and Personal Savings Allowance (PSA) to protect their cash from tax.

“Variable savings rates remained relatively resilient month-on-month, with the average easy access rate rising to 3.18%, and the average notice account rate falling to 4.27%. However, it remains the case that consumers with an easy access account from one of the high street banks may not be earning a decent return, so it is wise to check if their loyalty is being paid, and if not, switch. More than six months have passed since the market had a rise to the Bank of England base rate, but rate competition among challenger banks has not waned. There are now more savings providers than ever before on our records, giving consumers more choice and encouraging competition.”

Rachel Springall, Finance Expert at Moneyfacts, said:

“Savers may be pleased to see the sizeable rate cuts to fixed bonds felt in recent months calmed during February. Month-on-month, the average rate on a one-year fixed bond fell by a marginal 0.01%, a far smaller cut than the 0.25% recorded a month prior. On longer-term bonds, the average rate rose by 0.01% after back-to-back months of relentless rate cuts. This is a positive turn of events for the fixed rate bond market, as between the start of 2024 and the start of February, the average longer-term bond fixed rate fell by a significant 0.34%, the biggest monthly drop recorded in 15 years. However, the swap rate market remains volatile, and providers will also have their own reasons to enhance or worsen their fixed rates; such moves during February resulted in a drop to the average shelf-life of a fixed rate bond to 27 days, from 39 days.

“Cash ISA rates showed a mixed bag of changes month-on-month. The average easy access ISA rate rose to its highest point in more than 15 years, but the average notice ISA rate fell. The average one-year fixed ISA rate fell by 0.02% and the longer-term ISA remained unchanged. Savers only have a couple of weeks left until the current tax-year ends, so providers are working hard to attract their deposits but will need to manage their market position carefully. The new ISA reforms will come into effect from 6 April and could encourage consumers to use Cash ISAs more. However, regardless of these reforms, savers would be wise to take advantage of both their ISA allowance and Personal Savings Allowance (PSA) to protect their cash from tax.

“Variable savings rates remained relatively resilient month-on-month, with the average easy access rate rising to 3.18%, and the average notice account rate falling to 4.27%. However, it remains the case that consumers with an easy access account from one of the high street banks may not be earning a decent return, so it is wise to check if their loyalty is being paid, and if not, switch. More than six months have passed since the market had a rise to the Bank of England base rate, but rate competition among challenger banks has not waned. There are now more savings providers than ever before on our records, giving consumers more choice and encouraging competition.”

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.

 

Contact Us If you're looking for extra comment, a chart or more information, then please give us a call. We are always more than happy to help.
Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Apprentice Press & PR Assistant