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Savings rates soar and choice of cash ISAs improves

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
20/02/2023

Savings rates soar and choice of cash ISAs improves

Savings rates soar and choice of cash ISAs improves

The latest Moneyfacts UK Savings Trends Treasury Report data shows average interest rates failed to rise across both one-year and longer-term fixed bonds, but variable rates rose for another consecutive month. The market trends suggest a period of stability has arrived in the aftermath of interest rate volatility that engulfed 2022.

 

The latest Moneyfacts UK Savings Trends Treasury Report data shows average interest rates failed to rise across both one-year and longer-term fixed bonds, but variable rates rose for another consecutive month. The market trends suggest a period of stability has arrived in the aftermath of interest rate volatility that engulfed 2022.

 

  • All variable rates (easy access, notice and ISA equivalents) rose for the 12th consecutive month, the first time on Moneyfacts records (this data set began in 2007).
  • Both the average easy access and notice rates hit their highest levels in more than 14 years. The average easy access rate rose to 1.74% and stands at its highest point since December 2008 (2.58%). The average notice rate rose to 2.49%, now the highest rate since December 2008 (2.64%).
  • The easy access ISA rate rose month-on-month to 1.85% and stands at its highest point since February 2009 (2.02%). The average notice ISA rate rose to 2.57% and is at its highest since January 2009 (2.96%).
  • The average one-year fixed bond rose to 3.58% and stands at its highest point since December 2008 (4.43%). The average longer-term fixed bond rose to 3.87%.
  • The average one-year fixed ISA rose to 3.41%, its highest point since January 2009 (3.43%). The average longer-term fixed ISA rate rose to 3.68% and stands at its highest point since June 2011 (3.70%).
  • Product choice overall rose to 1,727 savings deals (including ISAs), the biggest month-on-month increase since March 2022. The number of Cash ISAs (439) is at its highest level since August 2019 (453).
  • All variable rates (easy access, notice and ISA equivalents) rose for the 12th consecutive month, the first time on Moneyfacts records (this data set began in 2007).
  • Both the average easy access and notice rates hit their highest levels in more than 14 years. The average easy access rate rose to 1.74% and stands at its highest point since December 2008 (2.58%). The average notice rate rose to 2.49%, now the highest rate since December 2008 (2.64%).
  • The easy access ISA rate rose month-on-month to 1.85% and stands at its highest point since February 2009 (2.02%). The average notice ISA rate rose to 2.57% and is at its highest since January 2009 (2.96%).
  • The average one-year fixed bond rose to 3.58% and stands at its highest point since December 2008 (4.43%). The average longer-term fixed bond rose to 3.87%.
  • The average one-year fixed ISA rose to 3.41%, its highest point since January 2009 (3.43%). The average longer-term fixed ISA rate rose to 3.68% and stands at its highest point since June 2011 (3.70%).
  • Product choice overall rose to 1,727 savings deals (including ISAs), the biggest month-on-month increase since March 2022. The number of Cash ISAs (439) is at its highest level since August 2019 (453).
Moneyfacts Treasury Reports Moneyfacts Treasury Reports Moneyfacts Treasury Reports

 

Savings market analysis – average rates

 

Feb-21

Feb-22

Jan-23

Feb-23

Average easy access rate

0.17%

0.21%

1.56%

1.74%

Average easy access ISA rate

0.24%

0.26%

1.66%

1.85%

Average notice rate

0.36%

0.54%

2.38%

2.49%

Average notice ISA rate

0.40%

0.37%

2.36%

2.57%

Average one-year fixed rate bond

0.46%

0.82%

3.51%

3.58%

Average longer-term fixed rate bond*

0.68%

1.22%

3.85%

3.87%

Average one-year fixed rate ISA

0.42%

0.59%

3.34%

3.41%

Average longer-term fixed rate ISA*

0.61%

1.04%

3.63%

3.68%

*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

 

Feb-21

Feb-22

Jan-23

Feb-23

Number of live savings account options (excluding ISAs)

1,064

1,223

1,266

1,288

Number of live ISA options

323

379

429

439

Source: Moneyfacts Treasury Reports

 

Savings market analysis – average rates

 

Feb-21

Feb-22

Jan-23

Feb-23

Average easy access rate

0.17%

0.21%

1.56%

1.74%

Average easy access ISA rate

0.24%

0.26%

1.66%

1.85%

Average notice rate

0.36%

0.54%

2.38%

2.49%

Average notice ISA rate

0.40%

0.37%

2.36%

2.57%

Average one-year fixed rate bond

0.46%

0.82%

3.51%

3.58%

Average longer-term fixed rate bond*

0.68%

1.22%

3.85%

3.87%

Average one-year fixed rate ISA

0.42%

0.59%

3.34%

3.41%

Average longer-term fixed rate ISA*

0.61%

1.04%

3.63%

3.68%

*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

 

Feb-21

Feb-22

Jan-23

Feb-23

Number of live savings account options (excluding ISAs)

1,064

1,223

1,266

1,288

Number of live ISA options

323

379

429

439

Source: Moneyfacts Treasury Reports

Rachel Springall, Finance Expert at Moneyfacts, said:

“Savings rates rose across the market month-on-month showing positive signs of provider competition. The consecutive Bank of England base rate rises, coupled with competition among challenger banks, has led to both the average easy access and notice rates hitting their highest levels in more than 14 years. The number of accounts overall for savers has also grown, seeing its biggest month-on-month rise since March 2022 and choice now rests at the highest count since November 2022. These are all encouraging signs for the months ahead, particularly as we edge closer to a new tax-year.

“Cash ISA season has sprung a growth in product choice, which is edging closer to record-breaking levels. Savers will find the number of deals (439) is at its highest since August 2019 (453), when choice peaked. Average interest rates offered across both easy access and notice ISAs stand at their highest since 2009, but the margin between the two (0.72%) stands at its highest on record. A notice ISA may then be an alternative for savers who want a bit of flexibility, but desire a higher rate than may be on offer on an easy access ISA. Those savers who prefer to fix their ISA cash will find the average one-year fixed ISA rate stands at its highest point since January 2009 and is a notable 2.82% higher than that of a year ago. It is still imperative for savers to be conscious of their Personal Savings Allowance (PSA) in addition to their ISA allowance.

“Fixed bond rates appear to be in much demand from savers, but at the same time, there are those dipping into their more flexible pots, according to recent figures published by the Bank of England. There was an outflow of £1.2 billion from interest-bearing sight deposits in December 2022 and demand for fixed accounts recorded an inflow of almost £7 billion into time deposits. Our own data shows volatility surrounding fixed bond rates has softened after recent months of uncertainty, with the average shelf life of fixed bonds rising to its highest level since May 2022, up from 29 days to 48 days, the biggest month-on-month rise in more than two years (December 2021). However, when providers review their market positions, a standout top rate that sits way above its nearest competition may not be around for long, particularly if offered by a challenger bank that reaches it funding targets.”

Rachel Springall, Finance Expert at Moneyfacts, said:

“Savings rates rose across the market month-on-month showing positive signs of provider competition. The consecutive Bank of England base rate rises, coupled with competition among challenger banks, has led to both the average easy access and notice rates hitting their highest levels in more than 14 years. The number of accounts overall for savers has also grown, seeing its biggest month-on-month rise since March 2022 and choice now rests at the highest count since November 2022. These are all encouraging signs for the months ahead, particularly as we edge closer to a new tax-year.

“Cash ISA season has sprung a growth in product choice, which is edging closer to record-breaking levels. Savers will find the number of deals (439) is at its highest since August 2019 (453), when choice peaked. Average interest rates offered across both easy access and notice ISAs stand at their highest since 2009, but the margin between the two (0.72%) stands at its highest on record. A notice ISA may then be an alternative for savers who want a bit of flexibility, but desire a higher rate than may be on offer on an easy access ISA. Those savers who prefer to fix their ISA cash will find the average one-year fixed ISA rate stands at its highest point since January 2009 and is a notable 2.82% higher than that of a year ago. It is still imperative for savers to be conscious of their Personal Savings Allowance (PSA) in addition to their ISA allowance.

“Fixed bond rates appear to be in much demand from savers, but at the same time, there are those dipping into their more flexible pots, according to recent figures published by the Bank of England. There was an outflow of £1.2 billion from interest-bearing sight deposits in December 2022 and demand for fixed accounts recorded an inflow of almost £7 billion into time deposits. Our own data shows volatility surrounding fixed bond rates has softened after recent months of uncertainty, with the average shelf life of fixed bonds rising to its highest level since May 2022, up from 29 days to 48 days, the biggest month-on-month rise in more than two years (December 2021). However, when providers review their market positions, a standout top rate that sits way above its nearest competition may not be around for long, particularly if offered by a challenger bank that reaches it funding targets.”

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.

 

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
Caitlyn Eastell Apprentice Press & PR Assistant