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Savers urged to act quickly to secure best fixed rate account deals
Derin Clark

Derin Clark

Online Reporter
Published: 21/09/2020

Savers are being urged to act quickly to secure the best saving deals available as the average shelf life of a fixed rate bond has fallen to just 36 days, which is its lowest level in over a decade.

Figures to be released in the Moneyfacts Savings Treasury Report show that the average shelf life on a fixed rate bond, which often offers the most competitive saving rates, has fallen from 42 days in August to just 36 days in September. This means that savers who do not act quickly to secure the best savings rates could find that they are missing out, as products are swiftly withdrawn after launch as they reach their maximum deposit threshold within record times.

Although the shelf life of fixed rate bond has fallen, average rates have seen a slight increase over the last month. Between August and September, the average rate on a one year fixed rate bond increased by 0.02%, from 0.63% in August to 0.65% in September. At the same time, the average rate on a longer-term fixed rate bond also increased by 0.02%, from 0.84% in August to 0.86% in September.

This is good news for savers able to lock their money into a savings account with a fixed rate term but, during these times of economic uncertainty, many savers are preferring easy access accounts, which allow them quick access to their money. So, it will come as a disappointment to many savers that the average rate on an easy access savings account has remained at 0.22% between August and September.

“Savers may be prioritising access to their cash due to the impact of the Coronavirus pandemic and have perhaps had more disposable income to put aside in case of emergencies,” explained Rachel Springall, finance expert at Moneyfacts.co.uk. “One of the most flexible and simple accounts out there to put spare cash into is an easy access account. Indeed, according to deposit data from the Bank of England, almost £53bn flowed into interest-bearing sight deposits since January, which includes easy access accounts. On the other hand, cash continues to flow out of fixed accounts and in the months to come savers might not want their cash locked away for too long.”

When looking at saving rates, savers should keep in mind that there are often rates available in the charts that are significantly higher than the average rates. For example, while the average easy access saving rate stands at 0.22% in September, the top-paying rate in the chart is currently 1.20%. This, combined with the fact that saving products are on the rise (rising from 1,083 in August to 1,133 in September), means that savers should regularly check the savings chart when looking for the best rates available.

Springall added: “In light of the uplift in rates and choice this month, savers will need to keep a close eye on the changing market and providers will need to act quickly to cope with excess demand. If providers do indeed hit their desired subscription limits, then they may cut rates or pull deals entirely to manage their exposure in the savings market.”

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NS&I to reduce rates- are premium bonds still a good investment?

Today, National Savings & Investments (NS&I) announced that it was planning to reduce rates on its variable rate savings products, premium bonds, as well as some fixed term saving accounts, which are due to come into effect on 24 November. Both NS&I’s variable rate saving products and premium bonds have proved popular this year, especially as they offered highly competitive rates at a time when many providers were reducing or withdrawing competitive savings rates. But as NS&I is set to reduce rates at a time when providers are starting to increase saving rates, we take a look at how competitive the reduced NS&I rates will be and whether premium bonds are still a good investment.

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The best savings rates this week 18.09.20

After a slow 2020, the savings market is moving again with new rates appearing almost on a daily basis this week. While new top rates have been entering the charts, many have reached their maximum deposits within a short time and, as a result, are being withdrawn by providers from the market within days. For example, on Tuesday, Skipton Building Society increased the rate on its easy access savings account, resulting in it paying a chart-topping rate of 1.20%, but this was withdrawn yesterday having already reached its maximum deposits.

As saving rates are changing on a daily basis, although all rates below were accurate at the time of publishing, savers would be recommended to check our savings charts regularly to see what rates are currently available.

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NS&I plans end to Premium Bond prize cheques

National Savings and Investments (NS&I) has announced plans to phase out its paper prize cheques to Premium Bond winners from December 2020 in a move that will eventually see all prize payments made directly into winner’s bank accounts.

The phasing out of paper prize cheques will last until March 2021and according to NS&I, this switch will result in “a quicker, easier and more secure way for customers to receive prizes”.
Since 2011, Premium Bond customers could choose to have prizes paid directly into their bank accounts and in the September 2020 draw 74% of winners had their prizes paid into their accounts rather than opting for a postal cheque.

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The best ISA rates this week 17.09.20

ISA savers looking for a short-term fixed rate ISA will be pleased to see new higher rates topping the one and two year fixed rate ISA charts this week. In addition to this, competition towards the top of the easy access ISA chart has improved this week, with more providers offering the third top rate of 0.90%.

It should be noted that the rates below are the best rates available at 12pm on Thursday 17 September 2020 and, although correct at the time of publishing, they may not be available after this time.

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Are children’s savings accounts the best option when saving for a child’s future?

16th September 2020

With rates as high as 3.00%, children’s savings accounts offer some of the most competitive savings rates in the charts

With rates as high as 3.00%, children’s savings accounts offer some of the most competitive savings rates in the charts

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Inflation rate falls to 0.2% - what are the best inflation beating savings accounts?

16th September 2020

The latest Consumer Price Index (CPI) figures show that during August inflation fell to a five-year low of 0.2%, which will be welcome news to many savers especially as savings rates are starting to rise

The latest Consumer Price Index (CPI) figures show that during August inflation fell to a five-year low of 0.2%, which will be welcome news to many savers especially as savings rates are starting to rise

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New 1.20% easy access rate

15th September 2020

Today Skipton Building Society has launched a chart-topping easy access account that pays 1.20% gross on anniversary

Today Skipton Building Society has launched a chart-topping easy access account that pays 1.20% gross on anniversary

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The best savings rates this week 11.09.20

11th September 2020

There was good news for savers this week, as we reported that rates have increased slightly this month, which could be the sign of the start of a slow savings recovery

There was good news for savers this week, as we reported that rates have increased slightly this month, which could be the sign of the start of a slow savings recovery

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Most Popular Savings News

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NS&I plans end to Premium Bond prize cheques

17th September 2020

National Savings and Investments (NS&I) has announced plans to phase out its paper prize cheques to Premium Bond winners from December 2020 in a move that will eventually see all prize payments made directly into winner’s bank accounts

National Savings and Investments (NS&I) has announced plans to phase out its paper prize cheques to Premium Bond winners from December

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After a slow 2020, the savings market is moving again with new rates appearing almost on a daily basis this week

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The latest Consumer Price Index (CPI) figures show that during August inflation fell to a five-year low of 0.2%, which will be welcome news to many savers especially as savings rates are starting to rise

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