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Fixed rates see largest monthly rise in over a decade

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
16/05/2022

Fixed rates see largest monthly rise in over a decade

Fixed rates see largest monthly rise in over a decade

Moneyfacts UK Savings Trends Treasury Report data shows average fixed rates have seen their biggest monthly rises in over a decade. The average one-year fixed bond, longer-term fixed bond, and longer-term fixed ISA stand at their highest levels since 2019.

 

Moneyfacts UK Savings Trends Treasury Report data shows average fixed rates have seen their biggest monthly rises in over a decade. The average one-year fixed bond, longer-term fixed bond, and longer-term fixed ISA stand at their highest levels since 2019.

 

  • The average one-year bond rate rose month-on-month to 1.24% and stands at its highest level in over two years. This is the biggest month-on-month rise since April 2011 and is the highest average rate recorded since November 2019 (1.28%). The average long-term fixed bond rate rose to 1.68%, the biggest rise since August 2009 and stands at its highest since August 2019 (1.72%).
  • The average one-year fixed ISA now stands at 1.02%. It has breached 1% for the first time since April 2020 and is also at its highest point in over two years (1.04% in April 2020). The average longer-term fixed ISA rate rose to 1.49%, the biggest month-on-month rise since July 2008 and stands at its highest point since August 2019 (1.51%).
  • The average easy access rate rose to 0.39% and stands at its highest point in two years (0.40% in May 2020). The average notice rate rose to 0.80%, the biggest rise since August 2007 and the highest rate in two years (0.89% in May 2020).
  • The easy access ISA rate rose month-on-month to 0.45% and stands at its highest point since June 2020 (0.45%). The average notice ISA rate also rose to 0.64% and is at its highest since June 2020 (0.69%).
  • Product choice overall has grown by 279 deals year-on-year, to 1,685 savings deals (including ISAs), the highest count in choice since March 2020, and is far beyond the record low count of 1,340 in April 2021.
  • The average one-year bond rate rose month-on-month to 1.24% and stands at its highest level in over two years. This is the biggest month-on-month rise since April 2011 and is the highest average rate recorded since November 2019 (1.28%). The average long-term fixed bond rate rose to 1.68%, the biggest rise since August 2009 and stands at its highest since August 2019 (1.72%).
  • The average one-year fixed ISA now stands at 1.02%. It has breached 1% for the first time since April 2020 and is also at its highest point in over two years (1.04% in April 2020). The average longer-term fixed ISA rate rose to 1.49%, the biggest month-on-month rise since July 2008 and stands at its highest point since August 2019 (1.51%).
  • The average easy access rate rose to 0.39% and stands at its highest point in two years (0.40% in May 2020). The average notice rate rose to 0.80%, the biggest rise since August 2007 and the highest rate in two years (0.89% in May 2020).
  • The easy access ISA rate rose month-on-month to 0.45% and stands at its highest point since June 2020 (0.45%). The average notice ISA rate also rose to 0.64% and is at its highest since June 2020 (0.69%).
  • Product choice overall has grown by 279 deals year-on-year, to 1,685 savings deals (including ISAs), the highest count in choice since March 2020, and is far beyond the record low count of 1,340 in April 2021.
Savings Treasury Report Savings Treasury Report Savings Treasury Report

Savings market analysis – average rates

 

May-20

May-21

Apr-22

May-22

Average easy access rate

0.40%

0.16%

0.33%

0.39%

Average easy access ISA rate

0.63%

0.22%

0.38%

0.45%

Average notice rate

0.89%

0.36%

0.67%

0.80%

Average notice ISA rate

0.89%

0.33%

0.51%

0.64%

Average one-year fixed rate bond

0.99%

0.44%

1.06%

1.24%

Average longer-term fixed rate bond*

1.18%

0.66%

1.48%

1.68%

Average one-year fixed rate ISA

0.91%

0.35%

0.87%

1.02%

Average longer-term fixed rate ISA*

1.07%

0.58%

1.30%

1.49%

*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

 

May-20

May-21

Apr-22

May-22

Number of live savings account options (excluding ISAs)

1,212

1,082

1,263

1,269

Number of live ISA options

336

324

413

416

Source: Moneyfacts Treasury Reports

Savings market analysis – average rates

 

May-20

May-21

Apr-22

May-22

Average easy access rate

0.40%

0.16%

0.33%

0.39%

Average easy access ISA rate

0.63%

0.22%

0.38%

0.45%

Average notice rate

0.89%

0.36%

0.67%

0.80%

Average notice ISA rate

0.89%

0.33%

0.51%

0.64%

Average one-year fixed rate bond

0.99%

0.44%

1.06%

1.24%

Average longer-term fixed rate bond*

1.18%

0.66%

1.48%

1.68%

Average one-year fixed rate ISA

0.91%

0.35%

0.87%

1.02%

Average longer-term fixed rate ISA*

1.07%

0.58%

1.30%

1.49%

*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

 

May-20

May-21

Apr-22

May-22

Number of live savings account options (excluding ISAs)

1,212

1,082

1,263

1,269

Number of live ISA options

336

324

413

416

Source: Moneyfacts Treasury Reports

Rachel Springall, Finance Expert at Moneyfacts, said:

“Savings rates are climbing at a promising pace but the upheavals within the sector are largely fuelled by providers who are competing towards the top end of the market. The average one-year fixed bond sits above 1% and the latest month-on-month rise is the highest uplift seen in over a decade. This is a substantial movement as the uplift pre-dates the influential Government lending initiatives that decimated the savings market, which included the Funding for Lending Scheme launched back in 2012.

“Fixed rates still have room for improvement, particularly with the Bank of England base rate rising back-to-back for a fourth time and now standing at 1%, the highest it’s been since February 2009. Those savers who are looking to secure a guaranteed return may be pleased to see competition in the fixed rate sector, but as rates improve, some savers may not be comfortable with locking their money away for longer than a year. However, those who wish to do so will find the longer-term fixed bond average has seen the largest monthly rise since August 2009, and is the highest rate seen since August 2019.

“Those savers hoping to see the Bank of England base rate rises passed on to their variable rate account will see both the average easy access rate and average notice rate has reached a two-year high this month. However, the stark reality is that average variable rate returns are still far lower than what was available before the first UK lockdown was initiated and base rate was consecutively cut to a record low of 0.10% in March 2020. As notice account returns creep ever closer to 1%, last seen in March 2020 (1.00%, a difference of 0.20% compared to the latest 0.80% return), the average easy access rate of 0.39% is less than half the average notice rate. Savers may then want to consider a notice account as an alternative if they want to acquire a higher rate, but do not want to commit to a fixed rate bond or ISA.

“Savings providers who are working hard to secure a place within the top end of the market must keep abreast of the quick pace of their competitors or could fall outside of the top rate tables. Those savers who are comparing their options will need to decide whether to fix or keep their money in a more flexible pot, but also consider their tax-free allowances and any difference in rate between ISAs and alternative accounts that do not have a tax-free wrapper.”

Rachel Springall, Finance Expert at Moneyfacts, said:

“Savings rates are climbing at a promising pace but the upheavals within the sector are largely fuelled by providers who are competing towards the top end of the market. The average one-year fixed bond sits above 1% and the latest month-on-month rise is the highest uplift seen in over a decade. This is a substantial movement as the uplift pre-dates the influential Government lending initiatives that decimated the savings market, which included the Funding for Lending Scheme launched back in 2012.

“Fixed rates still have room for improvement, particularly with the Bank of England base rate rising back-to-back for a fourth time and now standing at 1%, the highest it’s been since February 2009. Those savers who are looking to secure a guaranteed return may be pleased to see competition in the fixed rate sector, but as rates improve, some savers may not be comfortable with locking their money away for longer than a year. However, those who wish to do so will find the longer-term fixed bond average has seen the largest monthly rise since August 2009, and is the highest rate seen since August 2019.

“Those savers hoping to see the Bank of England base rate rises passed on to their variable rate account will see both the average easy access rate and average notice rate has reached a two-year high this month. However, the stark reality is that average variable rate returns are still far lower than what was available before the first UK lockdown was initiated and base rate was consecutively cut to a record low of 0.10% in March 2020. As notice account returns creep ever closer to 1%, last seen in March 2020 (1.00%, a difference of 0.20% compared to the latest 0.80% return), the average easy access rate of 0.39% is less than half the average notice rate. Savers may then want to consider a notice account as an alternative if they want to acquire a higher rate, but do not want to commit to a fixed rate bond or ISA.

“Savings providers who are working hard to secure a place within the top end of the market must keep abreast of the quick pace of their competitors or could fall outside of the top rate tables. Those savers who are comparing their options will need to decide whether to fix or keep their money in a more flexible pot, but also consider their tax-free allowances and any difference in rate between ISAs and alternative accounts that do not have a tax-free wrapper.”

Notes to editors

Pioneering financial comparison technology for over 30 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 30 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 30 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 30 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
Eleanor Williams Press Officer / Finance Expert