Are fixed savings rates set to rise? - Savings - News - Moneyfacts


Are fixed savings rates set to rise?

Are fixed savings rates set to rise?

Category: Savings

Updated: 05/12/2013
First Published: 05/12/2013

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Since changes to the Funding for Lending Scheme (FLS) were announced last week, savers might finally start to feel more positive.

Under the revised plans homeowner lending will be scaled back with the scheme instead focusing on the business sector, meaning banks and building societies will start to become more reliant on savers' cash again – which means competition, and ideally savings rates, could finally start to rise.

The news sends a positive message to the nation's savers, many of whom have been stuck with record low savings rates. Although there's unlikely to be an instant improvement rates could slowly start to nudge up, and it's thought ISAs and fixed rate bonds could see the quickest change.

Sylvia Waycot, editor of, is encouraged by the prospect:

"Savers must be dancing in the street at the announcement of the withdrawal of the Government's Funding for Lending Scheme. Equilibrium should finally be restored, and about time too.

"Of course, it will take a little while for better savings rates to hit the Moneyfacts best buy tables, but as ISA season is almost upon us that would be the obvious place to see the first signs of rate recovery."

However, fixed rate bonds were hit hardest by the FLS, so news of the scheme's change of direction is particularly encouraging for this sector. Even now there's a degree of competition starting to return to the fixed rate market – although it's suffered it's still the best place to go if you want a competitive deal, with the average five-year bond currently paying 2.55% compared to 2.46% just six months ago.

It's hoped further improvements will be witnessed over the coming months, but savers might want to consider opting for a short to medium-term fix or perhaps an easy access version (albeit at lower rates) to get the best deal now whilst ensuring they can make the most of any rate rises when they happen.

What Next?

Compare the best fixed rate bonds rates for your needs

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Savings rates plummet to fresh lows yet again

It’s becoming a recurring theme, and unfortunately, it’s showing no signs of stopping. Savings rates have plummeted to fresh lows once again as the impact of the base rate cut continues – and this month, product availability has followed.

Less than half of savings accounts beat inflation

Official figures show that inflation jumped up during September, with CPI rising to 1%. Not only does this mean that consumers may begin to feel the impact on their wallets, but there are now far fewer savings accounts that will beat inflation.

Number of savings accounts falls to record low

As if the continued drop in savings rates wasn’t bad enough, our latest research reveals another blow to already hard-pressed savers, with the number of accounts available having fallen to a record low.