Last week's inflation rise may have caused some savers to throw in the towel when it comes to searching out the best rates, but Moneyfacts Savings Treasury Report figures offer a glimmer of hope. All savings rates, except ISA rates, have risen for the first time since July 2015.
The largest increase, of 0.04%, was seen in the average long-term rate, which now stands at 1.44%, the highest it's been at since August 2016. As the table below shows, this is still nowhere close to the rates seen two years ago, but it's certainly a few steps in the right direction.
|Average No Notice Account||0.66%||0.57%||0.37%||0.38%|
|Average Notice Account||0.82%||0.81%||0.52%||0.55%|
|Average One-Year Fixed Rate||1.42%||1.19%||0.98%||1.00%|
|Average Long-term Fixed Rate||2.00%||1.63%||1.40%||1.44%|
|Source: Moneyfacts Treasury Report|
Charlotte Nelson, finance expert at Moneyfacts, agrees that these increases are a good sign: "The savings market might finally be moving in the right direction again, with all average rates on standard accounts increasing for the first time in 25 months. Though the rate increases may be small, the savings market is nonetheless showing signs of positivity, as providers try to attract savers in all areas of the market."
While there is some cause for optimism, a closer look at the data shows that the majority of the rate increases have once again been fuelled by challenger banks, who are still vying for the top spot. Indeed, if you look at any of the Best Buys, you'll notice the absence of the biggest names.
What this means is that while challengers are pushing the market up, high street names are keeping it down. And unfortunately for savers, high street banks have a lot more weight to throw around, so as Charlotte points out, "it's likely that the rate rises will remain small until the high street banks join in on the action."
However, that doesn't mean you shouldn't even try to find a decent rate. Given the ever-increasing uncertainty in the UK economy, it's more important than ever to research the market and make sure your savings accounts are still paying a decent rate.
"Those savers sitting on a rate of 0.25% or less will find they could be significantly better off by shopping around for a Best Buy option, and they will have to look away from the high street to really see a difference," Charlotte concluded.
So, whether you're inspired by the long-term rise to look at the top fixed savings accounts, or you'd rather just give some notice to access your account while still getting a decent rate, always remember that the top rates will be higher than the average. There's a difference between a negative interest (i.e. interest minus inflation) of -1.75% (on the top-paying easy access account) and -2.52% (the no notice average). Which would you rather have?
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.