The top bond rates continue on a downward trend but the leading one-year saw its smallest drop in six months. Moneyfactscompare.co.uk reveals the state of play in the fixed bond market for savers.
· The top one-, two- and three-year bonds fell, with the top four- and five-year bonds remaining unchanged.
· The top one-year fixed bond fell to 4.50% gross, which is 0.14% lower than the top five-year fixed bond at 4.64%. The top five-year bond rate was higher than the top one-year bond a month prior by 0.09%.
· In February 2025, the rate gap between the top one- and five-year bonds was 0.03%, as they sat at 4.77% and 4.80%, respectively.
· A year ago, the top one-year bond paid 5.40%, with the top five-year bond paying 4.95%, a gap of 0.45%.
| Savings market analysis – top fixed bond rates | |||||||
| Feb-23 | Aug-23 | Feb-24 | Aug-24 | Feb-25 | Jul-25 | Aug-25 | |
| Top one-year fixed bond rate | 4.16% | 6.05% | 5.16% | 5.40% | 4.77% | 4.55% | 4.50% |
| Top two-year fixed bond rate | 4.45% | 6.10% | 5.10% | 5.13% | 4.70% | 4.45% | 4.44% |
| Top three-year fixed bond rate | 4.45% | 6.00% | 4.61% | 4.85% | 4.63% | 4.45% | 4.44% |
| Top four-year fixed bond rate | 4.53% | 5.85% | 4.54% | 4.54% | 4.54% | 4.54% | 4.54% |
| Top five-year fixed bond rate | 4.63% | 5.80% | 4.64% | 4.95% | 4.80% | 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 4.01% gross is now 0.10% higher than the average five-year fixed bond at 3.91%. The rate gap was 0.13% a month prior.
· In February 2025, the rate gap between the average one- and five-year bonds was 0.28%, as they sat at 4.21% and 3.93%, respectively.
· A year ago, the average one-year bond paid 4.63%, while the average five-year bond paid 3.92%, a rate gap of 0.71%.
| Savings market analysis – average fixed bond rates | |||||||
| Feb-23 | Aug-23 | Feb-24 | Aug-24 | Feb-25 | Jul-25 | Aug-25 | |
| Average one-year fixed bond rate | 3.61% | 5.21% | 4.62% | 4.63% | 4.21% | 4.04% | 4.01% |
| Average two-year fixed bond rate | 3.82% | 5.19% | 4.34% | 4.33% | 4.06% | 3.94% | 3.91% |
| Average three-year fixed bond rate | 3.88% | 4.98% | 4.11% | 4.16% | 3.97% | 3.89% | 3.87% |
| Average four-year fixed bond rate | 4.00% | 4.81% | 3.96% | 3.87% | 3.98% | 3.94% | 3.94% |
| Average five-year fixed bond rate | 4.04% | 4.77% | 3.88% | 3.92% | 3.93% | 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:
“Over the past six months the top fixed bond rates have dropped by as much as 0.27%, but this is unsurprising given that there have been a few base rate cuts this year. However, month-on-month the top one-year bond has seen the smallest drop in six months. This week’s base rate decision was on a knife-edge, the Bank of England’s Monetary Policy Committee had many things to consider. While it is more likely a cut will have a more immediate impact on variable rates, it is not unheard of for providers to also factor this into their fixed rate pricing. Swap rates are heading back down to their 30-day lows, suggesting providers were already primed for a rate cut.
Loyalty is not always rewarded, so it is important that savers don’t leave their hard-earned cash languishing in a savings account earning poor interest for the sake of convenience. Last year, the lowest one-year bond offered by a big bank was 3.93%, whereas the market-leader paid well over 5%, meaning that some savers have lost out on almost £150. The Moneyfacts Average Savings Rate currently sits around 3.50%, which is a good ballpark figure to ensure savers do not miss out on the next attractive deal once their current bond matures. However, while inflation remains sticky investors may not immediately see any real term returns, so choosing from the 600 fixed bonds that out-pace inflation could be a more sensible decision.”
