As the top one-year fixed bond has seen its largest cut since September 2024, advisers and savers are urgently encouraged to review deals available. In this latest analysis, Moneyfactscompare.co.uk reveals the state of play in the fixed bond market for savers.
- The top one-, two- and three-year bonds fell month-on-month, with the top four- and five-year bonds remaining unchanged.
- The top one-year fixed bond fell to 4.45% gross, which is 0.19% lower than the top five-year fixed bond at 4.64%. The top one-year bond rate was higher than the top five-year bond a month prior by 0.01%.
- In December 2024, the rate gap between the top one- and five-year bonds was 0.16%, as they sat at 4.80% and 4.64%, respectively.
- A year ago, the top one-year bond paid 5.22%, with the top five-year bond paying 4.95%, a gap of 0.27%.
| Savings market analysis – top fixed bond rates | |||||||
| Dec-22 | Jun-23 | Dec-23 | Jun-24 | Dec-24 | May-25 | Jun-25 | |
| Top one-year fixed bond rate | 4.50% | 5.25% | 5.80% | 5.22% | 4.80% | 4.65% | 4.45% |
| Top two-year fixed bond rate | 4.76% | 5.28% | 5.70% | 4.96% | 4.60% | 4.54% | 4.44% |
| Top three-year fixed bond rate | 4.86% | 5.45% | 5.35% | 4.85% | 4.61% | 4.61% | 4.45% |
| Top four-year fixed bond rate | 4.80% | 5.05% | 5.30% | 4.75% | 4.54% | 4.54% | 4.54% |
| Top five-year fixed bond rate | 4.90% | 5.35% | 5.35% | 4.95% | 4.64% | 4.64% | 4.64% |
| Top interest rates based on a £10,000 deposit as at the start of the month. | |||||||
| Source: Moneyfactscompare.co.uk | |||||||
- The average one-year fixed bond rate at 4.02% gross is now 0.11% higher than the average five-year fixed bond at 3.91%. The rate gap was 0.21% a month prior.
- In December 2024, the rate gap between the average one- and five-year bonds was 0.36%, as they sat at 4.19% and 3.83%, respectively.
- A year ago, the average one-year bond paid 4.58%, while the average five-year bond paid 3.95%, a rate gap of 0.63%.
| Savings market analysis – average fixed bond rates | |||||||
| Dec-22 | Jun-23 | Dec-23 | Jun-24 | Dec-24 | May-25 | Jun-25 | |
| Average one-year fixed bond rate | 3.54% | 4.21% | 5.14% | 4.58% | 4.19% | 4.12% | 4.02% |
| Average two-year fixed bond rate | 3.85% | 4.26% | 4.97% | 4.30% | 4.00% | 3.99% | 3.94% |
| Average three-year fixed bond rate | 3.90% | 4.28% | 4.72% | 4.13% | 3.90% | 3.94% | 3.89% |
| Average four-year fixed bond rate | 3.94% | 4.20% | 4.64% | 3.94% | 3.91% | 4.00% | 3.91% |
| Average five-year fixed bond rate | 4.09% | 4.19% | 4.50% | 3.95% | 3.83% | 3.91% | 3.91% |
| Average interest rates based on a £10,000 deposit as at the start of the month. | |||||||
| Source: Moneyfactscompare.co.uk | |||||||
Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said:
“The best one-year fixed bond has seen the largest cut in nine months and many other market-leading bonds have also been slashed. Providers may have been keeping an eager eye on swap rates since the second cut to base rate this year as they are a helpful tool to ensure that their pricing strategies match the current market conditions. But April’s CPI rose rapidly to 3.5%, its highest in over a year, and with the most competitive deals paying just over 4% this means that savers are earning barely over 1% in real terms.
“It is positive to see a more traditional savings market make a comeback as long-term fixed bonds pay better returns than their short-term counterparts. If savers were to invest £10,000 for five years now, they could earn up to £2,546 by the time their deal matures; this is well over double the interest earned from the market-leader in June 2020, at just £933. While many savers may not be willing to lock away their investments for the long-term, it is a worthwhile consideration as it helps to avoid base rate cuts. It is imperative that during a period of harsh reductions, savers take the time to carefully review any deals they are considering and seek independent advice if needed.”
