Brits could earn £215 more on their savings if they take advantage of record interest rates on fixed-term accounts, according to Moneyfacts UK. One-year fixed savings rates have reached their highest level since September 2024, at 4.41%, following seven months of consecutive increases, according to Moneyfacts UK Savings Trends Treasury Report data. Long fixed-rate accounts have shot up too. The average rate has risen for the eighth consecutive month to 4.49%, the highest since December 2023. These are the most consistent rises since 2023 and 2022 respectively.
Caitlyn Eastell, personal finance analyst at Moneyfacts, said savers could earn £215 more in a year by switching to these higher-rate accounts, which pay up to 5.15%.
She said: “While volatile swap rates have been causing mayhem for borrowers, savings rates are telling a more positive story. Average non-ISA fixed rates have been rising consistently for over six months, and this is the longest sustained period of increases since 2023 for one-year fixed and 2022 for longer-term deals.
“Even the top rates have seen generous rises and across all terms, fixed rates are now paying above 5% for the first time since December 2023. For savers, this gives a welcome opportunity to secure some of the most competitive guaranteed returns in years.
“This could make a meaningful difference to savers whose money is currently sitting in lower-paying accounts or those whose existing fixed bonds are coming up to maturity. Someone with £10,000 to invest over a year could find themselves around £215 better off in the top one-year paying 5.15% compared to an account paying 3%.
“However, the very nature of fixed bonds means savers must lock away their money for the full term, so if they secure a deal now there is a risk that they could miss out on even more attractive returns should rates continue to rise.”
ISA rates have also steadily risen. The average one-year fixed rate ISA rose to 4.39%, its highest since August 2024. The average long-term ISA rose to 4.44%, the highest since December 2023.
Ms Eastell said that while these rates are slightly lower than non-ISA counterparts, the solid rates mean savers “don’t have to compromise”.
She said: “Typically, ISAs pay out slightly lower returns compared to their counterparts, however, some of the most attractive fixed ISAs now also pay over 5%, meaning savers don’t have to compromise on their tax-free savings.
“During August, £4.4billion flowed into ISAs, suggesting they are still popular among savers, particularly ahead of the cash ISA changes in April, but providers may work even harder to attract savers’ deposits as the deadline looms.”
