Top fixed savings deals endure further rate cuts

by | Apr 17, 2024

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Savers will find fluctuation in the top rate tables this month, including a drop to the market-leading one-year fixed rate bond. Moneyfactscompare.co.uk reveals the top rate deals available to savers searching for a competitive return.

·       The Consumer Price Index (CPI) fell to 3.2% during March, from 3.4% in February.

·       There are currently 1,364 savings accounts that beat inflation (162 easy access, 143 notice accounts, 163 variable rate ISAs, 281 fixed rate ISAs and 615 fixed rate bonds).

 
 

·       The Bank of England’s modal projection rate for inflation during Q1 2025 is 2.8%.

·       In April 2023, there were no deals that could beat 10.1% (March 2023 CPI) and in April 2022, there were no deals that could beat 7.0% (March 2022 CPI).

Savings market analysis
Top savings deals at £10,000 gross13-Apr-2219-Apr-2320-Mar-24Today
Easy access accountChase – 1.49%Chip – 3.49%Ulster Bank – 5.20%Ulster Bank – 5.20%
Notice accountOakNorth Bank – 1.25% (120-day)Marsden BS – 4.00% (180-day)Hinckley & Rugby BS – 5.25% (180-day)Hinckley & Rugby BS – 5.25% (180-day)
One-year fixed rate bondAl Rayan Bank – 1.85%**Allica Bank – 4.56%MBNA – 5.27%SmartSave – 5.17%
Two-year fixed rate bondAl Rayan Bank – 2.20%**SmartSave – 4.61%Oxbury Bank – 5.11% iFAST Global Bank – 5.10% 
Three-year fixed rate bondCynergy Bank – 2.28%Al Rayan Bank – 4.60%**UBL UK – 4.85% (payable on maturity)UBL UK – 4.85% (payable on maturity)
Four-year fixed rate bondGatehouse Bank – 2.25%**United Trust Bank – 4.56%UBL UK – 4.54% (payable on maturity)UBL UK – 4.54% (payable on maturity)
Five-year fixed rate bondGatehouse Bank – 2.50%**UBL UK – 4.63% (payable on maturity)UBL UK – 4.95% (payable on maturity)UBL UK – 4.95% (payable on maturity)
**Islamic bank, pays an expected profit rate. Inflation announcement dates. Top rates exclude deals with restrictive criteria. Notice accounts exclude those over 180 days.Source: Moneyfactscompare.co.uk
ISA market analysis
Top savings deals at £10,000 gross13-Apr-2219-Apr-2320-Mar-24Today
Easy access ISAMarcus by Goldman Sachs® – 1.00%Yorkshire Building Society – 3.35%Moneybox – 5.11% (includes bonus)Moneybox – 5.16% (includes bonus)
Notice ISAThe Melton BS – 1.00% (100-day)Marsden BS – 4.00% (180-day)West Brom BS – 5.10% (60-day)West Brom BS – 5.10% (60-day)
One-year fixed rate ISAGatehouse Bank – 1.40%**Gatehouse Bank – 4.20%**Virgin Money – 5.25%Virgin Money – 5.05%
Two-year fixed rate ISAGatehouse Bank – 1.75%**Paragon Bank – 4.28%UBL UK – 4.81% (payable on maturity)State Bank of India – 4.65% (payable on maturity)
Three-year fixed rate ISAGatehouse Bank – 1.85%**Virgin Money – 4.26%UBL UK – 4.59% (payable on maturity)UBL UK – 4.59% (payable on maturity)
Four-year fixed rate ISAGatehouse Bank – 1.90%**UBL UK – 4.37% (payable on maturity)UBL UK – 4.30% (payable on maturity)UBL UK – 4.30% (payable on maturity)
Five-year fixed rate ISAGatehouse Bank – 2.10%**UBL UK – 4.33% (payable on maturity)UBL UK – 4.52% (payable on maturity)UBL UK – 4.52% (payable on maturity)
Islamic bank, pays an expected profit rate. Inflation announcement dates. Top rates exclude deals with restrictive criteria. Notice ISAs exclude those over 180 days.Source: Moneyfactscompare.co.uk

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

 
 

“Savers will find a bit of volatility within the top rate tables since last month, so it’s essential to review their nest egg to ensure it’s still paying a competitive rate. Inflation eats away at savers’ hard-earned cash, so it’s worth keeping this in mind when comparing different savings accounts to ensure they are earning a decent real return.

“One area of the savings market to see another drop in the top rate is one-year fixed bonds. The best deals today are still paying over 5%, but at the start of 2024, the top rate paid 5.50%. Providers have been reducing fixed rates over recent months as expectations grew for future interest rates to come down, thankfully, such volatility has calmed. Those savers who are about to have their existing one-year bond mature can beat the market-leader from April 2023, and those savers coming off a two-year fixed bond will find rates more than double the top rates available in April 2022.

“In the run-up to the new 2024/25 tax-year it proved to be a positive ISA season. Easy access Cash ISAs thrived, which is great news for those who want to utilise their allowance but require some flexibility with their nest egg. The new ISA rules may also encourage savers to use ISAs more this year. Those looking to invest for longer will still find the top fixed ISAs are paying less than their fixed rate bond counterparts, but fixed bond rates are higher than this time a year ago, so those who invest could end up breaching their Personal Savings Allowance (PSA). Indeed, higher rate tax-payers have a £500 limit on any interest earned, and basic rate tax-payers get a £1,000 limit. Those who invest a £20,000 lump sum in an account that pays 5% for one year will earn £1,000.

 
 

“Switching accounts is essential for any saver who finds their loyalty is not being rewarded. Considering the more unfamiliar brands is wise but it’s important consumers take time to review any restrictive criteria an account can impose to ensure it works for them.”

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