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Savings rates show signs of improvement

Savings rates show signs of improvement

Category: Savings

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 It is now over 6 months old so the content may be out of date.

We don't want to get too excited, but latest research from Moneyfacts has revealed slight signs of life in the savings market, with the majority of average rates creeping up! They're still not great, but anything is better than nothing, and there are even signs that the longed-for ISA season finally took hold.

Signs of life

The figures show that both average variable rates in the non-ISA sector increased this month, with the no notice rate rising by 0.01% to 0.67% – just short of a two-year high – and the notice account posting a 0.03% rise for the second month running, now standing at 0.79%, the highest rate seen since December 2013.

Overall product numbers increased, too, now standing at 1,651, a monthly increase of 43 and the highest figure seen since the end of 2012. Furthermore, the number of cash ISAs available has also increased for the fourth month running, rising by 26 to stand at 333 – the highest number of ISAs seen since October 2012 when the same amount was recorded.

It's looking good, and it all points to growing competition in the sector. And, with cash ISAs comprising the bulk of the overall product increase, it shows that activity picked up in line with traditional ISA season – meaning savers will get a better deal! This is further evident when looking at average rates: the average no notice and one-year fixed ISA rates both increased by 0.02%, now standing at 1.14% and 1.48% respectively.

Notably, the one-year ISA rate is the highest seen since last November, and its latest increase follows the usual pattern witnessed at this time of year: one-year ISAs typically experience a surge of interest and therefore a boost in rates during ISA season, arguably because consumers tend to view ISAs as one-year products. It makes sense, as if you get a renewed tax-free allowance every year, why wouldn't you want to re-evaluate your savings needs?

Make the most of your savings

The recent announcement that inflation fell into negative territory is even better news for savers, with all accounts on the market paying a rate that will beat it! But, while it's easier than ever to secure a rate that won't see the value of your savings eroded, you still want to get the best returns possible.

That's why it's so important to do your research. Average rates may be creeping up, but the top-paying rate in each sector will offer an even better return for your money, so check out our best buy tables to see how much you could get.

Disclaimer: 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.