Savings rates climb as easy access ISA breaches 2%

Variable rates have risen for the past 13 consecutive months - the first time on Moneyfacts’ records.

The average easy access cash ISA rate has risen month-on-month to currently stand at 2.01%, the highest it’s been since February 2009. This is according to the Moneyfacts UK Savings Trends Treasury Report, which also found that variable rates have risen across the board for 13 consecutive months for the first time since our records began.

This sees the average easy access and notice savings account rates also reach their highest in more than 14 years. Up from 0.25% this time last year, the average easy access rate has increased to 1.85%. Likewise, the average notice account has witnessed an even bigger jump, from 0.56% in March 2022 to 2.61% a year on.

Meanwhile, the average notice ISA rate rose to 2.64% - its highest point since January 2009.

As for average fixed rates, the Moneyfacts UK Savings Trends Treasury Report’s findings are a little less uniform.

While the average one year fixed bond rose to 3.65% and stands at its highest point since December 2008, the average longer term fixed bond fell. At 3.86%, this is down 0.01% compared to last month.

However, both one year and longer term fixed rate ISAs saw a rise in their average rates. For the average one-year fixed ISA, this rate now stands at 3.56%, the highest it’s been since December 2008. At 3.72%, the average longer-term fixed ISA also stands at its highest level, this time since May 2011.

The savings market is going through a buoyant period thanks to a mix of rate competition, base rate rises and the approach of a new tax year.

Only last week, the Bank of England’s Monetary Policy Committee voted to increase interest rates for the 11^th consecutive time, which some banks and building societies will have chosen to pass on. While this is good news for savers, it’s important to check that your provider is offering a competitive rate, especially as the average easy access rate is 1.60% higher than a year ago. There will be some accounts not receiving the full benefits of base rate rises, at which point it’s down to savers to compare and switch.

Interest rates are also rising as we near the start of a new tax year next week. There’s been a rush of enticing offers being launched for savers looking to secure a deal before the 2023/24 tax year begins. Particularly, savers with outstanding ISA allowance left to use may notice improved rates across cash ISAs.

Finally, growing choice in the market means it’s more important than ever for savers to consider both unfamiliar and household names. With 1,743 different savings products available to choose from, there are now more overall savings deals on the market than at the start of the year. Still, savers will need to act quickly to take advantage of a top rate, as a deal may only be on the shelf for a short period.