Moneyfacts: Fixed bond and fixed ISA rates see sizeable cuts

by | Nov 21, 2023

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Moneyfacts UK Savings Trends Treasury Report data shows fixed rates fell month-on-month across the board for the first time since 2021, with sizeable cuts not seen since 2020.

Savings market analysis – average rates
 Nov-21Nov-22Oct-23Nov-23
Average easy access rate0.19%1.16%3.16%3.18%
Average easy access ISA rate0.26%1.26%3.24%3.29%
Average notice rate0.55%1.91%4.15%4.24%
Average notice ISA rate0.37%1.72%4.01%4.09%
Average one-year fixed rate bond0.77%3.29%5.42%5.36%
Average longer-term fixed rate bond*1.06%3.77%5.11%5.02%
Average one-year fixed rate ISA0.56%2.98%5.27%5.20%
Average longer-term fixed rate ISA*0.92%3.44%5.02%4.92%
*Longer-term fixed bonds or ISAs are those with terms over 550 days. Average interest rates based on a £5,000 deposit as at the start of the month.
Source: Moneyfacts Treasury Reports
Savings market analysis – product count
 Nov-21Nov-22Oct-23Nov-23
Number of live savings account options (excluding ISAs)1,2461,3141,4501,442
Number of live ISA options382421529526
Source: Moneyfacts Treasury Reports

Rachel Springall, Finance Expert at Moneyfacts, said:

“Fixed bonds and ISA rates have fallen across the board, which will be disappointing news to savers. There was a clear downward trend in the fixed market as all average fixed rates fell for the first time since March 2021. There have been sizeable month-on-month cuts not seen since 2020 and it is the first time that the average one-year fixed bond and ISA rates have fallen in over two years.

 
 

“There are expectations for interest rates to drop in the months ahead, so fixed savings rates could fall further before the year is over. However, there are still some providers enhancing their fixed rate savings deals, and challenger banks could go against the trend and increase their rates if they need to entice deposits to fund their future lending.

“Those savers who prefer to keep their cash in a flexible pot will find the average easy access and easy access ISA rates rose for another consecutive month. There is also positive momentum across notice accounts and notice ISAs, so overall there have been consecutive month-on-month rises on all variable rates for almost two years.

“The uplift in rates should encourage savers to review their existing portfolio as they could get a better return elsewhere. However, it is worth noting that some of the best deals have withdrawal restrictions or carry an introductory bonus, so savers will need to check all the terms of any account carefully.

 
 

“Despite a slight dip in the choice of products, there are still many deals to choose from designed to suit different requirements. It is imperative savers take time to assess all the options available to them to find the right deal that suits their day-to-day needs and not just chase the best rate.

“To secure the best possible deal, savers will need to act quickly, as providers can control any spikes in demand with subsequent rate cuts and withdrawals. As it stands, providers may well be looking closely at the margins towards the top end of the market and may shift down the top rate tables to better manage cash inflows if their close competitors make significant cuts.”

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