Fixed savings rates are always far higher than their easy access counterparts, and recently they've been leading the way in terms of rate rises, too. Happily, our latest figures show that they're still very much on the up, with averages having risen to the highest seen since last Autumn!
That's according to figures from the latest Moneyfacts UK Savings Trends Treasury Report, which show that the average one-year fixed rate has risen by 0.03% for the second month running to stand at 0.98%, the highest figure since September 2016! The long-term equivalent has edged up too, rising by 0.02% to 1.40%, a nine-month high.
There are more savings deals to choose from as well, with the number of savings accounts available rising for the sixth consecutive month to hit 1,650, an increase of 59 on a monthly basis and the highest total recorded since last March. It also marks the strongest monthly rise seen since April 2012 – during that month, the product count rose by 72, which incidentally was also when the sector reached its peak availability of 2,093.
This means that you've now got more products to choose from than you've had in a very long time, and in the case of the fixed bond sector, the rates are better than they have been in months!
There's also a slight sign of life in the variable rate market – the average rate for a notice account may have dipped by 0.01% this month (to 0.53%), but the average easy access rate has risen for the first time since July 2015! It's only a slight rise of 0.01% and it still sits at just 0.37%, but after almost two years of the rate either falling or remaining static, this latest boost is certainly welcome.
Things aren't quite so clear-cut in the ISA market – although the number of ISAs available has hit a five-year high, the average one-year ISA rate edged down by 0.01% this month to 0.92%, while the long-term ISA rate remained unchanged at 1.14%, so it looks as though providers still aren't competing in this sector of the market, at least at rate level.
Nonetheless, the fact that improvements are continuing in the non-ISA sector has got to be good news – you just have to look at our savings Best Buys to see how much things are progressing! You'll probably see a notable lack of high street names, though, which is why you may want to consider smaller providers.
Our data shows that new product launches and rate rises are predominantly coming from building societies and challenger banks, many of whom still need savers' cash in order to boost their balance sheets and secure funds to lend out. The same can't be said for many high street providers – they already have access to cheap funds through the Term Funding Scheme, and many still have reserves from its predecessor, the Funding for Lending Scheme, so they have no need for our money.
This is why so few offer good savings rates, and also why you really do need to consider the alternatives. Challenger banks consistently sit at the top of the Best Buys, and building societies certainly give them a run for their money. Given that they all come with the same financial protection, there's no reason not to give them a go.
It's only these smaller brands who are really competing, yet with several challengers recently entering the market and more still in the pipeline, it's hoped that this pattern will continue – which could lead to even better savings rates in the months ahead! Fingers crossed…
Compare the best fixed savings rates to make your money work harder
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.