Rachel Springall, Finance Expert at Moneyfacts, said:

“Savers may be pleased to see that not only has product choice risen to its highest point in over 12 years, but the variety of savings providers offering accounts has reached a record high. There were far fewer providers on the market in 2012, and the savings landscape has changed significantly over the years. A rise in both product choice and providers can instil an optimistic view for the savings market, particularly if the new participants are eager for deposits to fund their future lending and boost their rates to stand out from their peers. As there are over 2,000 different savings products on the market - which include fixed rate bonds, easy access accounts, notice accounts and their Cash ISA equivalents - it is imperative providers continue to tailor their product range to appeal to the unique needs of new and existing customers.

“Notice accounts and notice ISAs are a more niche area of the savings market, but the average interest rates difference compared to their easy access counterparts has moved up to its highest point in six months. Savers could then earn a little more interest if they don’t need instant access to their pot. However, as murmurs continue of a cut to the Bank of England base rate in August, variable rate accounts could face cuts. Savers may then wish to invest their cash in a fixed rate bond or ISA, where both the average one-year and longer-term fixed rates rose month-on-month. The one-year average bond rate has, however, outpaced the longer-term for 13 consecutive months, and the difference between the two stands at 0.49%.

“Cash ISAs have seen enormous growth since the start of 2024, with a rise of 114 options over the past six months alone; the number of options now stands at its highest point on our records which date back to 2007. The average one-year fixed ISA rate has surpassed the longer-term equivalent since the start of August 2023, but a guaranteed return over the next few years may become more appealing should interest rates fall in the coming months. As it stands savers would be wise to utilise both their Personal Savings Allowance (PSA) and ISA allowance but keep in mind that the newly formed Government could review these areas and introduce other ways to instil the savings habit for consumers on lower incomes.”