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ARCHIVED ARTICLE This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Published: 16/01/2019
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In the battle of the best savings rates, it's generally assumed that longer-term deals win the day – but while that's true as a whole, long-term rates aren't rising as dramatically as one-year deals, with the average for the latter having hit a four-year high!

Rate boost

Starting a new year can be a great time to review the top savings rates, and happily, our latest figures show that average rates on one-year fixed bonds have risen sharply in recent months to now stand at 1.48%, the highest seen since November 2015. This also marks a rise of 0.30% in the last year, and is a dramatic improvement on the rate recorded two years ago, with the average standing at a record low of just 0.92% in January 2017.

The top rates available have also notably improved, with it now possible to secure a return of 2.10% on a one-year bond (from Al Rayan Bank), a far cry from the top rate of 1.40% paid two years ago (from Atom Bank). The table below highlights the latest changes in more detail, and also shows that average five-year rates have seen similar improvement, though the average hasn't risen as rapidly as in the one-year sector.




Average one-year bond




Best one-year bond

Atom Bank = 1.40%

Al Rayan Bank = 1.85%**

Al Rayan Bank = 2.10%**

Average five-year bond




Best five-year bond

Ikano Bank = 2.05%

PCF Bank = 2.42%

Atom Bank = 2.70%

**Expected profit rate, interest paid quarterly. (All savings rates shown are gross.) Source:

Saver optimism

"Savers have reason to be optimistic entering 2019, as competition in the market continues to push rates higher," said Rachel Springall, finance expert at "Those savers hoping to get a competitive return on their cash but who don't want to lock their money away for too long may be pleasantly surprised by the returns on offer, particularly within the one-year fixed bond Best Buys."

One key area of growth, Rachel points out, has been the influence of challenger brands and Islamic banks, who continue to up their rates to get a prominent place in the charts. Such banks have been the driving force of competition in recent years, and this in turn has meant one-year deals have improved immensely. Not only has the average risen by 0.56% from its low point in January 2017, but the rate is higher than that seen in January 2016 – before the rate dropped significantly – when it stood at 1.47%, highlighting the continued recovery of the market.

"However, at the same time, long-term fixed rate bonds are not keeping up the same pace, and this may well be attributed to consumer uptake," noted Rachel. "In a market of economic uncertainty, when there is speculation that interest rates will rise further in 2019, a five-year fixed bond may not be as attractive as a one-year bond.

"Either way, any savers looking to get a top rate today would be wise to not ignore the more unfamiliar challenger brands and Islamic banks, as they offer some of the best deals around."


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