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Savers currently have more accounts to choose from than at any time in the last five-and-a-half years, according to new research set to be published in the latest Moneyfacts UK Savings Trends Treasury Report.
With the total number of savings products available in the market rising by 154 in the last year, this month's total of 1,791 accounts is the highest recorded since November 2012.
Driving the rise is a significant uplift in the number of cash ISA deals that are now available. Indeed, some 409 ISA deals are currently on offer to savers wanting a tax-free account, more than at any time since May 2012.
What is more, the renewed competition in the savings market is having a positive effect on interest rates too. The report reveals that the average one-year fixed rate ISA is now paying 1.22%, compared with 1.19% in May. Meanwhile, among non-ISA accounts, the average long-term fixed rate bond is now offering 1.76%, up from 1.74% a month earlier.
Continuing to set the pace are the newer banks, who seem to be increasingly focusing their attention on the ISA market where the competition is not as great as it once was.
"Yet again, it is the challenger banks that are driving the product numbers forward, as they look to expand their dominance beyond their usual home of fixed rate bonds," said Charlotte Nelson, finance expert at Moneyfacts.co.uk. "Building societies are also in on the action, as they look to keep loyal customers on their books when their accounts reach maturity. The fact that there are fewer providers in the ISA market means it is far easier to compete here than in the non-ISA market, where competition for the top spot is fierce."
So even without a rise in the base rate of interest, things are looking a little rosier for savers. Indeed, it is really only the reluctance of the main banks to get involved that is preventing rates from climbing even higher.
However, savers seem to be starting to take note, with the latest official figures from UK Finance showing that a significant £8.2 billion of ISA savings has been moved out of high street banks in the last year, a fall of 5%.
"Any savers still sitting on a rate paying less than base rate need to consider voting with their feet and opting for a Best Buy worthy deal," adds Charlotte.
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