Rachel Springall, Finance Expert at Moneyfacts, said:

“Savers may find it encouraging to see product choice hitting a record high despite ongoing rate volatility. The savings landscape has changed significantly over the years and a rise in product choice can instil an optimistic view for savers who need different types of accounts to suit various needs. Challenger banks have notably worked hard this year in injecting some healthy competition into the market, with their intent to draw in funds for their future lending. However, average rates moves showed mixed signs month-on-month; while some fell or remained unchanged, longer-term fixed rates rose.

“Easy access accounts have been the casualty from cuts to the Bank of England base rate; the average rate has felt its biggest monthly drop in over four years (June 2020). Notice accounts also took a hit, seeing a notable monthly drop. As murmurs continue of more cuts to base rate next year, variable rate accounts could be doomed to drop further. Savers may then wish to invest their cash in a fixed rate bond or ISA for a guaranteed return. Longer-term fixed options may become more popular in the months ahead, but it is worth noting that the average one-year fixed bond rate has outpaced the longer-term for over a year, and the difference between the two stands at 0.28%.

“The choice of Cash ISAs has seen enormous growth in 2024, which is encouraging news for savers looking to utilise their ISA allowance. The number of options now stands at its highest point on our records, which date back to 2007. In a similar pattern to fixed bonds, the average one-year fixed ISA rate has surpassed the longer-term equivalent for over a year. Savers who are debating what type of account will work hardest for them in 2025 must ensure they keep within their Personal Savings Allowance (PSA), but if they fear they will breach it, be sure to take advantage of their ISA allowance to protect their savings interest from tax.”