Savers, we've got some great news – signs of life are cropping up all over the place in the savings market, and those looking for the guarantee of a fixed rate can benefit even more! Our figures show that fixed rates are continuing to climb across much of the market, all thanks to growing competition, and interestingly, this competition is no longer confined to challenger banks…
Our research shows that the average one-year fixed rate rose by 0.03% this month to stand at 1.45%, the highest rate seen since December last year, while the average long-term rate saw an even sharper increase of 0.04% to 2.04%.
However, it was a tale of two halves for the ISA sector, as although the average one-year ISA rate remained unchanged at 1.44%, the long-term ISA rate recorded the largest increase of them all! Up 0.05% in a single month, the average rate now stands at 1.89%, a much-needed improvement on recent months.
These increases are particularly notable given the current environment and the typical movement of average rates: over the last few years, movement has usually been confined to a percentage point or two either way, so the fact that these increases have been so dramatic (in context) highlights the growing competition in the sector.
However, what's even more significant is the fact that, while last month's rate rises were primarily the result of competition between newer challenger banks, this month has seen more well-known names begin to compete, too.
Our data shows just how much things are changing. A raft of mainstream providers have increased fixed rates in the last month, including Halifax, Lloyds Bank, Leeds Building Society, TSB and Bank of Scotland, to name but a few, which suggests a definite desire on the part of high street names to attract fixed rate savers.
Not only that, but we've recorded 172 savings rate increases since the beginning of July, a figure that completely dwarfs the 73 rate reductions over the same period, further highlighting the growing motivation to compete. This desire may not yet be apparent in the variable rate sector of the market, where average rates have remained largely static, but any improvement is to be welcomed.
Want to make the most of it? Then check out our best buys! The fact that high street names are actively competing should encourage savers who may have been wary of newer banks, but really, there's no comparison. Challenger banks still dominate the best buy charts and they come with the same kind of financial protection as better-known providers, so if you want the best returns, you'd be wise to consider them.
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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.
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