Savings rates remain low across the board at the moment as the Bank of England recently decided to keep the base rate at 0.1 percent. While this limits what retail banks can offer, new deals are being regularly launched to entice savers.
“Many are looking to tie-up some of their savings in competitive fixed rate deals, and our new Fixed Rate Saver account should appeal to many of these savers.”
Savers may be able to find additional offers over the coming weeks, with additional research from Moneyfacts showing average fixed bonds and ISAs rose month-on-month (June to July) for the first time since October 2020.
Additionally, the average no notice rate also rose for the first time since October and it is at the highest rate seen since February 2021.
Moneyfacts laid out July’s average rates for a range of financial products:
- Average easy access rate – 0.17 percent
- Average easy access ISA rate – 0.23 percent
- Average notice rate – 0.42 percent
- Average notice ISA rate – 0.31 percent
- Average one-year fixed rate bond – 0.52 percent
- Average longer-term fixed rate bond – 0.77 percent
- Average one-year fixed rate ISA – 0.39 percent
- Average longer-term fixed rate ISA – 0.66 percent
Rachel Springall, a Finance Expert at Moneyfacts, welcomed this news but warned savers may need to act fast if they want to take advantage of the rates on offer.
Ms Springall said: “The average rate rises on fixed bonds and ISAs will be positive news to savers, particularly to those who may rely on their interest as a form of income.
“Overall, the choice of deals available to savers has improved this month, and while these levels are far from the volumes seen before the pandemic, it is still a refreshing change to the drop in both products and rates to record lows during 2021.
“Apart from the average notice ISA rate, all savings rates rose month-on-month, good news for those looking at either an ISA or non-ISA, and this comes just one month after all savings rates rose or remained unchanged for the first time since October 2020.
“The rise of challenger banks in recent years has breathed life into the savings market and there are now more savings providers than ever before on our records. The injection of much-desired competition has been noticed even more recently, as challenger banks make their presence known in the top rate tables.
“In the past few weeks alone, there have been several rate increases to fixed bonds, many by challenger banks. However, the shelf life on a fixed rate bond fell to 53 days, showing signs that a good deal may not last too long as brands continue to react to market movements.
“A positive change to see has been a rise to the average easy access rate, encouraging for savers comparing deals but regardless of rate, it seems the popularity of having flexible access to cash remains a vital aspect to savers. Indeed, savers are still storing their cash in sight deposits, with £6billion in deposits made in May – or £56billion so far this year – according to the Bank of England. Considering the pandemic effects on financial vulnerability, savers may even choose a deal with a brand they trust and is completely flexible in the months ahead.
“Whether a saver or a savings provider, it is clear to see the positive stabilisation to the savings market in the past two months, but we are still some way off from rejuvenation. Savers have had a terrible time with rates falling to record lows this year and as things improve, they would be wise to keep a close eye on the top rate tables and act quickly to take advantage. Savings providers will need to be ready to react to demand, keep a firm grasp on market trends and service their customers as best they can during these challenging times.”