Short-term savings bond rate falls as demand grows | will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be Scamsmart.

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 It is now over 6 months old so the content may be out of date.


Lieke Braadbaart

Online Writer
Published: 15/01/2018
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The upcoming Moneyfacts Savings Trends Treasury Report brings some unhappy news, as the one-year fixed bond rate has fallen for the first time since January 2017. This is especially unfortunate as consumer demand has increased at the same time, making it that much harder for you to get the best deal.

Average rate down

While 2017 was a relatively positive year for the one-year fixed bond market, with the average one-year fixed rate seeing a small consecutive increase for eight months and no decrease throughout the year, the start of 2018 breaks that trend. As a result, the rate now stands at 1.16%, down slightly from 1.18% in December.

This is still significantly higher than the rate seen a year ago, as the table below shows. However, most of the boost seen in 2017 came from challenger banks. As Charlotte Nelson, finance expert at Moneyfacts, pointed out, challenger banks "will only offer a decent rate for their bonds if the rest of their business needs a financial boost."

Jan-17 Jul-17 Dec-17 Jan-18
Average one-year fixed rate (excluding ISAs) 0.90% 1.07% 1.18% 1.16%

This means that "the reduction to the average one-year fixed rate this month could simply be a matter of the challenger banks dialling back their competitive efforts over the Christmas period," Charlotte continued. So, next month could very well see rates rise again. And yet, savers are still likely to be disappointed, with the recent rate boost falling far short of base rate expectations.

But consumer demand increases

The Treasury Report goes on to reveal that consumer demand for fixed rate bonds has increased by 3.30%. "These were the only adult accounts to see heightened interest during the month of December," said Charlotte. These figures are backed up by data from the Bank of England, which saw a flow of money into fixed bonds for the first time in six months during December.

"With Moneyfacts' consumer demand figures being positive, it is likely that savers feel rates have settled enough to commit to a fixed term," Charlotte said. "However, it is a little concerning that the moment savers feel comfortable enough to consider a fixed rate bond, rates start to fall, leaving many to wonder if this foreshadows the economic climate for 2018."

As rates decrease while demand is up, it's up to you to be quick on your feet and grab the best savings deal you can find before it disappears. Keep an eye on the Best Buys to see what comes out on top, and if you find a deal that you like, don't wait too long to take advantage.


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. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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