Highest fixed rates all year as bond shelf life drops

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
20/09/2021

Highest fixed rates all year as bond shelf life drops

Highest fixed rates all year as bond shelf life drops

Moneyfacts UK Savings Trends Treasury Report data reveals that average fixed bond and ISA rates rose to their highest this year and the average shelf-life of a fixed bond fell to 33 days.

 

Moneyfacts UK Savings Trends Treasury Report data reveals that average fixed bond and ISA rates rose to their highest this year and the average shelf-life of a fixed bond fell to 33 days.

 

  • All average fixed bond and fixed ISA rates rose month-on-month (August to September) for the third consecutive month. Average rates are now at their highest point since 2020, including the one-year fixed ISA rate, now 0.49%, the highest since December 2020 when it was 0.52%. The differential rate between the average one-year fixed bond and ISA now stands at 0.18% which is the biggest margin since April 2014.
  • Shelf life for a fixed rate bond fell to 33 days on average, the lowest since October 2020 when it was 28 days and down from 53 days a month ago.
  • The average no notice rate fell this month, however, the average notice rate rose for the fifth month running to 0.47%, its highest point since December 2020 when it was 0.47%. 
  • The average no notice ISA and notice ISA rates remained unchanged, with the latter at a record low of 0.31%.
  • Product choice rose for the fifth month running and there are now 1,573 savings deals (including ISAs) on the market – volumes not seen since April 2020, when there were 1,588 deals.
  • ISA product choice improved to 363 deals, the highest seen since October 2020 when it was 373.
  • All average fixed bond and fixed ISA rates rose month-on-month (August to September) for the third consecutive month. Average rates are now at their highest point since 2020, including the one-year fixed ISA rate, now 0.49%, the highest since December 2020 when it was 0.52%. The differential rate between the average one-year fixed bond and ISA now stands at 0.18% which is the biggest margin since April 2014.
  • Shelf life for a fixed rate bond fell to 33 days on average, the lowest since October 2020 when it was 28 days and down from 53 days a month ago.
  • The average no notice rate fell this month, however, the average notice rate rose for the fifth month running to 0.47%, its highest point since December 2020 when it was 0.47%. 
  • The average no notice ISA and notice ISA rates remained unchanged, with the latter at a record low of 0.31%.
  • Product choice rose for the fifth month running and there are now 1,573 savings deals (including ISAs) on the market – volumes not seen since April 2020, when there were 1,588 deals.
  • ISA product choice improved to 363 deals, the highest seen since October 2020 when it was 373.

Savings market analysis – average rates

 

Sep-19

Sep-20

Aug-21

Sep-21

Average easy access rate

0.64%

0.22%

0.18%

0.17%

Average easy access ISA rate

0.93%

0.32%

0.24%

0.24%

Average notice rate

1.08%

0.53%

0.44%

0.47%

Average notice ISA rate

1.16%

0.54%

0.31%

0.31%

Average one-year fixed rate bond

1.34%

0.65%

0.60%

0.67%

Average longer-term fixed rate bond*

1.64%

0.86%

0.87%

0.94%

Average one-year fixed rate ISA

1.27%

0.58%

0.45%

0.49%

Average longer-term fixed rate ISA*

1.45%

0.78%

0.73%

0.79%

*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

 

Sep-19

Sep-20

Aug-21

Sep-21

Number of live savings account options (excluding ISAs)

1,472

1,133

1,191

1,210

Number of live ISA options

416

352

362

363

Source: Moneyfacts Treasury Reports

Savings market analysis – average rates

 

Sep-19

Sep-20

Aug-21

Sep-21

Average easy access rate

0.64%

0.22%

0.18%

0.17%

Average easy access ISA rate

0.93%

0.32%

0.24%

0.24%

Average notice rate

1.08%

0.53%

0.44%

0.47%

Average notice ISA rate

1.16%

0.54%

0.31%

0.31%

Average one-year fixed rate bond

1.34%

0.65%

0.60%

0.67%

Average longer-term fixed rate bond*

1.64%

0.86%

0.87%

0.94%

Average one-year fixed rate ISA

1.27%

0.58%

0.45%

0.49%

Average longer-term fixed rate ISA*

1.45%

0.78%

0.73%

0.79%

*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

 

Sep-19

Sep-20

Aug-21

Sep-21

Number of live savings account options (excluding ISAs)

1,472

1,133

1,191

1,210

Number of live ISA options

416

352

362

363

Source: Moneyfacts Treasury Reports

Rachel Springall, Finance Expert at Moneyfacts, said:

“Vigorous competition from savings providers has resulted in the average shelf life for a fixed rate bond falling to 33 days on average and all fixed bond and fixed ISA rates rose month-on-month. Average rates on fixed bonds and ISAs are now at their highest level all year, which will be great news to savers. However, savings providers will need to act quickly to react to the notable flux of rate rises in the market and indeed any demand from savers looking to fix their cash for a competitive return.

“Stability and progress to improve competition and choice within the savings market should be encouraged, however, not all interest rates are rising. The average no notice rate fell month-on-month and the average no notice ISA and notice ISA remained unchanged, with the latter standing at a record low. Clearly, there is far less competition between different sectors of the market – particularly on accounts where savers could withdraw their cash overnight. Savers would then be wise not to assume all rates have risen and be sure to compare carefully.

“Savers who feel uneasy in locking their money away for a year or more may find notice accounts as an alternative between fixed and easy access accounts, especially as notice rates are on the rise. Month-on-month the average notice rate rose for the fifth month running to 0.47% and is at its highest all year. There are many challenger banks within this arena, as there are in the fixed bond market, but where activity is lacking is within the ISA market, which could do with a healthy injection of competition. However, in a low-interest-rate environment and with savers utilising the Personal Savings Allowance, it's understandable if some savers overlook ISAs altogether.

“Where savers feel confident to invest will require their judgement on access, and so far, the signs for 2021 point towards easy access accounts being the most favourable. Indeed, according to the Bank of England, the inflow into sight deposits during July was just over £7bn, and almost £72bn so far this year. As interest rates continue to change, savers and providers alike will need to act with pace to keep on top of rate adjustments and demand.”

Rachel Springall, Finance Expert at Moneyfacts, said:

“Vigorous competition from savings providers has resulted in the average shelf life for a fixed rate bond falling to 33 days on average and all fixed bond and fixed ISA rates rose month-on-month. Average rates on fixed bonds and ISAs are now at their highest level all year, which will be great news to savers. However, savings providers will need to act quickly to react to the notable flux of rate rises in the market and indeed any demand from savers looking to fix their cash for a competitive return.

“Stability and progress to improve competition and choice within the savings market should be encouraged, however, not all interest rates are rising. The average no notice rate fell month-on-month and the average no notice ISA and notice ISA remained unchanged, with the latter standing at a record low. Clearly, there is far less competition between different sectors of the market – particularly on accounts where savers could withdraw their cash overnight. Savers would then be wise not to assume all rates have risen and be sure to compare carefully.

“Savers who feel uneasy in locking their money away for a year or more may find notice accounts as an alternative between fixed and easy access accounts, especially as notice rates are on the rise. Month-on-month the average notice rate rose for the fifth month running to 0.47% and is at its highest all year. There are many challenger banks within this arena, as there are in the fixed bond market, but where activity is lacking is within the ISA market, which could do with a healthy injection of competition. However, in a low-interest-rate environment and with savers utilising the Personal Savings Allowance, it's understandable if some savers overlook ISAs altogether.

“Where savers feel confident to invest will require their judgement on access, and so far, the signs for 2021 point towards easy access accounts being the most favourable. Indeed, according to the Bank of England, the inflow into sight deposits during July was just over £7bn, and almost £72bn so far this year. As interest rates continue to change, savers and providers alike will need to act with pace to keep on top of rate adjustments and demand.”

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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 with ISDN (01603 230551) and Skype (Moneyfacts).

 

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 with ISDN (01603 230551) and Skype (Moneyfacts).

 

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Rachel Springall Press Officer / Finance Expert
Eleanor Williams Press Officer / Finance Expert