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Fixed savings rates drop to lowest levels in over a year

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
21/10/2024

Fixed savings rates drop to lowest levels in over a year

Fixed savings rates drop to lowest levels in over a year

Moneyfacts UK Savings Trends Treasury Report data shows the average rates on one-year and longer-term fixed bonds and ISAs dropped to their lowest levels recorded in over a year.

 

Moneyfacts UK Savings Trends Treasury Report data shows the average rates on one-year and longer-term fixed bonds and ISAs dropped to their lowest levels recorded in over a year.

 

  • The average easy access rate remained unchanged month-on-month at 3.07%. The average notice rate fell to 4.21%, its lowest level since October 2023. The average notice rate pays 1.14% more than the average easy access rate.
  • The average easy access ISA rate fell month-on-month to 3.28%. The average notice ISA rate fell to 4.03%, its lowest level since October 2023. The average notice ISA rate pays 0.75% more than the average easy access ISA rate.
  • The average one-year fixed bond rate fell to 4.31%, its lowest point since June 2023. The average longer-term fixed bond fell to 3.93%, its lowest point since March 2023. The difference in rate between the average one-year and longer-term fixed bond stands at 0.38%, with the one-year bond paying a higher average return.
  • The average one-year fixed ISA rate fell to 4.18%, its lowest point since June 2023. The average longer-term fixed ISA fell to 3.88%, its lowest point since April 2023. The difference in rate between the average one-year and longer-term fixed ISAs stands at 0.30%, with the one-year bond paying a higher average return.
  • Product choice overall rose month-on-month to 2,015 savings deals (including ISAs). The choice of Cash ISAs rose slightly to 555 deals. The number of savings providers fell by one to 142 month-on-month.

 

  • The average easy access rate remained unchanged month-on-month at 3.07%. The average notice rate fell to 4.21%, its lowest level since October 2023. The average notice rate pays 1.14% more than the average easy access rate.
  • The average easy access ISA rate fell month-on-month to 3.28%. The average notice ISA rate fell to 4.03%, its lowest level since October 2023. The average notice ISA rate pays 0.75% more than the average easy access ISA rate.
  • The average one-year fixed bond rate fell to 4.31%, its lowest point since June 2023. The average longer-term fixed bond fell to 3.93%, its lowest point since March 2023. The difference in rate between the average one-year and longer-term fixed bond stands at 0.38%, with the one-year bond paying a higher average return.
  • The average one-year fixed ISA rate fell to 4.18%, its lowest point since June 2023. The average longer-term fixed ISA fell to 3.88%, its lowest point since April 2023. The difference in rate between the average one-year and longer-term fixed ISAs stands at 0.30%, with the one-year bond paying a higher average return.
  • Product choice overall rose month-on-month to 2,015 savings deals (including ISAs). The choice of Cash ISAs rose slightly to 555 deals. The number of savings providers fell by one to 142 month-on-month.

 

Savings market analysis – average rates

 

Oct-22 Oct-23 Sep-24 Oct-24

Average easy access rate

0.99%

3.16%

3.07%

3.07%

Average easy access ISA rate

1.06%

3.24%

3.29%

3.28%

Average notice rate

1.64%

4.15%

4.23%

4.21%

Average notice ISA rate

1.49%

4.01%

4.08%

4.03%

Average one-year fixed rate bond

2.68%

5.42%

4.43%

4.31%

Average longer-term fixed rate bond*

3.12%

5.11%

3.99%

3.93%

Average one-year fixed rate ISA

2.29%

5.27%

4.29%

4.18%

Average longer-term fixed rate ISA*

2.76%

5.02%

3.92%

3.88%

*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

 

Oct-22

Oct-23

Sep-24

Oct-24

Number of live savings account options (excluding ISAs)

1,325

1,450

1,447

1,460

Number of live ISA options

423

529

553

555

Source: Moneyfacts Treasury Reports

 

Savings market analysis – average rates

 

Oct-22 Oct-23 Sep-24 Oct-24

Average easy access rate

0.99%

3.16%

3.07%

3.07%

Average easy access ISA rate

1.06%

3.24%

3.29%

3.28%

Average notice rate

1.64%

4.15%

4.23%

4.21%

Average notice ISA rate

1.49%

4.01%

4.08%

4.03%

Average one-year fixed rate bond

2.68%

5.42%

4.43%

4.31%

Average longer-term fixed rate bond*

3.12%

5.11%

3.99%

3.93%

Average one-year fixed rate ISA

2.29%

5.27%

4.29%

4.18%

Average longer-term fixed rate ISA*

2.76%

5.02%

3.92%

3.88%

*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

 

Oct-22

Oct-23

Sep-24

Oct-24

Number of live savings account options (excluding ISAs)

1,325

1,450

1,447

1,460

Number of live ISA options

423

529

553

555

Source: Moneyfacts Treasury Reports

 

Rachel Springall, Finance Expert at Moneyfacts, said:

“Savers looking to secure a guaranteed return may be disappointed to see average fixed rates on bonds and Cash ISAs drop to their lowest levels in over a year. However, the margins of cuts month-on-month across one-year and longer-term fixed bond and ISA average rates were lower than the previous month. Fixed bond rates have now fallen for a third consecutive month and more drops could well be on way due to expectations that the Bank of England will cut base rate before the year ends. Despite the rate cuts, product choice remains resilient across the market. The average shelf-life of a fixed rate bond rose to 57 days, up from 51 in September, its highest level since March 2022.

“Those savers coming to the end of their fixed deal will find average rates are more than 1% lower across one-year and longer-term fixed bond and Cash ISAs than a year ago. In comparison to six months ago, those savers who secured a one-year fixed bond or Cash ISA will find average rates were 0.29% and 0.33% higher respectively. There continues to be a rate discrepancy between fixed bonds and ISAs, but with rates on fixed bonds much higher than years gone by, there will be savers out there who could breach their personal savings allowance (PSA) with a bond, particularly if they are a higher rate taxpayer. Cash ISAs are therefore a solid choice due to their tax-free wrapper, so it’s worth exploring all savings account options before investing.

“As we draw nearer to the end of the year, now is a crucial time for savers to review their existing portfolio. Variable rates have not been immune to rate cuts over the past few months, so savers should proactively move their pots if they are getting a poor return on their hard-earned cash. Savers need to stay vigilant as providers will no doubt be assessing their market positions over the coming weeks and will be eyeing up the upcoming Budget to see how this may impact future rate expectations.”

Rachel Springall, Finance Expert at Moneyfacts, said:

“Savers looking to secure a guaranteed return may be disappointed to see average fixed rates on bonds and Cash ISAs drop to their lowest levels in over a year. However, the margins of cuts month-on-month across one-year and longer-term fixed bond and ISA average rates were lower than the previous month. Fixed bond rates have now fallen for a third consecutive month and more drops could well be on way due to expectations that the Bank of England will cut base rate before the year ends. Despite the rate cuts, product choice remains resilient across the market. The average shelf-life of a fixed rate bond rose to 57 days, up from 51 in September, its highest level since March 2022.

“Those savers coming to the end of their fixed deal will find average rates are more than 1% lower across one-year and longer-term fixed bond and Cash ISAs than a year ago. In comparison to six months ago, those savers who secured a one-year fixed bond or Cash ISA will find average rates were 0.29% and 0.33% higher respectively. There continues to be a rate discrepancy between fixed bonds and ISAs, but with rates on fixed bonds much higher than years gone by, there will be savers out there who could breach their personal savings allowance (PSA) with a bond, particularly if they are a higher rate taxpayer. Cash ISAs are therefore a solid choice due to their tax-free wrapper, so it’s worth exploring all savings account options before investing.

“As we draw nearer to the end of the year, now is a crucial time for savers to review their existing portfolio. Variable rates have not been immune to rate cuts over the past few months, so savers should proactively move their pots if they are getting a poor return on their hard-earned cash. Savers need to stay vigilant as providers will no doubt be assessing their market positions over the coming weeks and will be eyeing up the upcoming Budget to see how this may impact future rate expectations.”

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