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Savers shift their focus to fixed rates

Savers shift their focus to fixed rates

Category: Savings

Updated: 22/03/2012
First Published: 22/03/2012

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 It is now over 6 months old so the content may be out of date.

Britons are increasingly changing their savings habits, moving away from variable accounts and opting for the security of fixed rates.

Savers have faced a number of challenges in recent years, with low interest rates, high inflation and a squeeze on household finances all combining to test consumers' savings resolve.

But with the Bank of England's base rate of interest showing no signs of moving from its historic low of 0.5%, savers are now looking to take advantage of higher rates offered by long-term fixed rate accounts, research by Halifax has found.

Figures show that the number of savers opting for a fixed rather than variable rate savings account has increased fourfold since 2011, with many now looking to longer terms for greater returns.

In fact, more than half of all customers looking for a savings account have taken a fixed rate savings account in 2012 so far, a significant increase on the 13% that did so during the first three months of 2011.

And it's longer term savings accounts that are demanding the attention, with nearly half (46%) of fixed rate customers selecting deals of three to five years.

"We have seen a stark shift in savings behaviour in 2012 with customers primarily opting for fixed rate products over variable rates.

"The fact that the Bank of England base rate has remained at a historic low since 2009 may well be playing into this decision, with many also looking for greater security in an otherwise uncertain economic environment," Richard Fearon, head of savings at Halifax, said.

The research is supported by recent research from Moneyfacts which found that more than four in ten searches for savings on Moneyfacts.co.uk were for fixed rate accounts.

If you're looking for a secure long-term account for your money, be sure to use the Moneyfacts Best Buy tables to find the savings account that fits the bill for you.

Currently, savers can secure returns of around 4% on two and three year fixed rate accounts and up to 4.65% if they're prepared to lock their funds away for longer.

Find the best savings rates for you - Compare savings accounts

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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