Savings rates have hit their highest level in fifteen years as banks compete to win customers on the back of the Bank of England's higher base rate.
According to Moneyfacts Compare, average rates on one-year and longer-term fixed bonds, alongside individual savings accounts, all sit above 5% currently.
Those on other easy access and notice accounts have also risen to their highest since 2008, with rates spanning from 2.95% to 4.04% on such savings pots.
“Due to intensive competition among challenger banks, average fixed rates have risen for the past six months,” Moneyfacts finance expert Rachel Springall explained.
Though mortgage holders have indeed been hit by the rising base rate, which the Bank of England lifted to 5.25% through 14 consecutive hikes, better returns for savers are a silver lining.
As a result of the central bank’s attempts to fight inflation, savings rates have soared over the past year.
Savings rate increases from September 2022 to September 2023 as per Moneyfacts:
- Average easy access rate - 0.84% to 2.95%
- Average easy access ISA rate - 0.92% to 3.04%
- Average notice rate - 1.41% to 4.04%
- Average notice ISA rate - 1.21% to 3.89%
- Average one-year fixed bond - 2.29% to 5.34%
- Average longer-term fixed rate bond - 2.67% to 5.12%
- Average one-year fixed rate ISA - 1.96% to 5.19%
- Average longer-term fixed rate ISA - 2.35% to 5.02%
“It’s a good reminder for savers to review any existing accounts and any personal savings goals,” Springall added.
“Comparing different types of accounts and exploring the more unfamiliar brands is wise, particularly when challenger banks offer some of the most lucrative returns.”
The Bank of England is poised to make its latest decision on interest later this and analysts expectr the base rate to rise by 0.25% once again.