The top one-year fixed bond dropped month-on-month, resulting in deals paying over 5% exiting the savings market. Moneyfactscompare.co.uk reveals the state of play in the fixed bond market for savers.
The top one-year and two-year fixed bonds fell month-on-month, with the top three-year, four-year and five-year bonds remaining unchanged. The top one-year fixed bond fell to 4.95% gross which is now 0.31% higher than the top five-year fixed bond at 4.64%. The rate gap was 0.41% a month prior. In April 2024, the rate gap between the top one- and five-year bonds was 0.30%, as they sat at 5.25% and 4.95%, respectively. A year ago, the top one-year bond paid 6.20%, with the top five-year bond paying 5.80%, a gap of 0.40%.
| Savings market analysis – top fixed bond rates | |||||||
| Apr-22 | Oct-22 | Apr-23 | Oct-23 | Apr-24 | Sep-24 | Oct-24 | |
| Top one-year fixed bond rate | 1.85% | 4.20% | 4.54% | 6.20% | 5.25% | 5.05% | 4.95% |
| Top two-year fixed bond rate | 2.10% | 4.50% | 4.55% | 6.05% | 5.10% | 4.90% | 4.72% |
| Top three-year fixed bond rate | 2.20% | 4.60% | 4.60% | 5.95% | 4.85% | 4.72% | 4.72% |
| Top four-year fixed bond rate | 2.17% | 4.45% | 4.56% | 5.75% | 4.54% | 4.54% | 4.54% |
| Top five-year fixed bond rate | 2.40% | 4.55% | 4.65% | 5.80% | 4.95% | 4.64% | 4.64% |
| Top interest rates based on a £10,000 deposit as at the start of the month. | |||||||
- The average one-year fixed bond at 4.30% gross is now 0.49% higher than the top five-year fixed bond at 3.81%. The rate gap was 0.63% a month prior.
- In April 2024, the rate gap between the average one- and five-year bonds was 0.67%, as they sat at 4.59% and 3.92%, respectively.
- A year ago, the average one-year bond paid 5.44%, with the average five-year bond paying 4.79%, a gap of 0.65%.
| Savings market analysis – average fixed bond rates | |||||||
| Apr-22 | Oct-22 | Apr-23 | Oct-23 | Apr-24 | Sep-24 | Oct-24 | |
| Average one-year fixed bond rate | 1.08% | 2.73% | 3.84% | 5.44% | 4.59% | 4.43% | 4.30% |
| Average two-year fixed bond rate | 1.28% | 3.01% | 3.93% | 5.35% | 4.32% | 4.19% | 4.06% |
| Average three-year fixed bond rate | 1.50% | 3.16% | 4.00% | 5.07% | 4.14% | 3.99% | 3.93% |
| Average four-year fixed bond rate | 1.78% | 3.30% | 4.02% | 5.00% | 3.94% | 3.77% | 3.87% |
| Average five-year fixed bond rate | 1.75% | 3.40% | 4.03% | 4.79% | 3.92% | 3.80% | 3.81% |
| Average interest rates based on a £10,000 deposit as at the start of the month. | |||||||
Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said:
“Savers who were unable to snap up a shorter-term fixed rate that paid just above the 5% mark may be disheartened to see that they have disappeared from the market entirely for the first time this year, with top rates consistently tumbling across the board. The gap between top short-term and long-term is closing as rates are slashed. It is possible that the savings market could be facing more uncertain times ahead, with the fast-approaching Autumn Budget and volatile repricing, which may cause providers to drop rates further.
“It is a sign of good competition that many of the top deals are continuing to be dominated by challenger banks as they are more likely to go against the cutting trend, but this may be less likely as there are still expectations of another cut to base rate before the year is up. Savers who are eager to lock into a guaranteed rate should do so swiftly before they face another plunge.
“Over the past six months, average rates have fallen, but given this included a cut to base rate this isn’t entirely unsurprising, although usually this tends to impact variable rates in the first instance. Month-on-month, drops have remained the main trend, except for the average four- and five-year bonds which have seen marginal increases, but it is unlikely that they will continue to rise. However, it is still a long way off from returning to a traditional savings market where longer-term bonds are incentivised over those in the shorter-term.”
