‘Variable rates have not been immune to rate cuts over the past few months, so savers should proactively move their pots if they are getting a poor return on their hard-earned cash’
Some average fixed savings rates, where funds must be “locked” away, have plummeted to their lowest in at least a year, according to a financial information website.
Moneyfacts reported that the average rate for accounts requiring notice before access was just 4.21% at the beginning of this month, marking its lowest since October 2023. Notice Isa rates also dipped to 4.03%, the lowest since October 2023. Typically, accounts needing notice offer higher returns than easy access options, which permit immediate withdrawals.
The average easy access rate stood at 3.07% and the easy access Isa rate at 3.28% at the start of October. The one-year fixed bond rate dropped to 4.31%, its nadir since June 2023, while the average longer-term fixed bond rate descended to 3.93%, the lowest since March 2023; these longer-term accounts are those exceeding 550 days.
One-year fixed Isa rates fell to 4.18%, the lowest since June 2023, and longer-term fixed Isas to 3.88%, the lowest since April 2023.
Finance expert Rachel Springall from Moneyfacts commented: “Savers looking to secure a guaranteed return may be disappointed to see average fixed rates on bonds and cash Isas drop to their lowest levels in over a year.
“Despite the rate cuts, product choice remains resilient across the market. The average shelf-life of a fixed-rate bond rose to 57 days, up from 51 in September, its highest level since March 2022. As we draw nearer to the end of the year, now is a crucial time for savers to review their existing portfolio.
“Variable rates have not been immune to rate cuts over the past few months, so savers should proactively move their pots if they are getting a poor return on their hard-earned cash. Savers need to stay vigilant as providers will no doubt be assessing their market positions over the coming weeks and will be eyeing up the upcoming Budget to see how this may impact future rate expectations.”
For its analysis, Moneyfacts based its assumptions on someone having a £5,000 savings deposit, with average rates taken from the first available day of each month.
