UK savings rates are on the rise
Savers are finally seeing fixed-rate returns edge higher again, with the best deals now paying rates last seen close to two years ago. Options for savers have also seen an explosion as more savings products and ISAs have become available.
New figures from Moneyfacts show the average one-year fixed bond has climbed to 4.28% – its strongest level since October 2024 – while longer fixed deals have also improved, taking the average longer-term rate to 4.31%, the highest since January 2024. That matters for households weighing up whether to tie their money up for a guaranteed return, particularly as there’s uncertainty about where interest rates head next.
Moneyfacts says the average one-year fixed rate has increased for six months on the bounce, and longer-term fixed rates have risen for seven straight months, keeping competition intense for customers shopping around.
It’s not just rates moving – the range of accounts on offer is also at record levels. Moneyfacts says there are now 2,642 savings products available across the market, including ISAs. Excluding ISAs, savers can choose from 1,894 deals, the highest number since Moneyfacts began tracking the data in 2007.
Cash ISA choice has also grown, with 748 products now available, while the number of savings providers has reached a new high of 160. Caitlyn Eastell, personal finance analyst at Moneyfacts, said: “Savers have been handed another welcome boost this month, with fixed savings rates continuing to climb and competition remaining incredibly strong across the market.”
She added the latest uptick is likely to be welcomed by those who have held off fixing, waiting to see if providers would improve rates further before committing their cash.
However, not every part of the savings market is rising. Moneyfacts found average easy-access rates have stayed flat at 2.53% for a third month in a row, while the average easy-access ISA rate has edged down slightly to 2.71%. Notice accounts have provided a brighter spot, with the average rate rising to 3.42%, the highest since January.
Overall, the Moneyfacts Average New Savings Rate has now increased for a seventh consecutive month, reaching 3.62% – up from 3.46% a year earlier.
Eastell said savers appear to be moving money more actively in search of better returns. She pointed to Bank of England figures showing almost £3.5billion was withdrawn from easy-access and current accounts, even as total household deposits rose by £3.8billion. Eastell said this indicates savers are “reassessing where their money is being held and moving their cash between different accounts”.
The data also suggests shoppers may have a little more breathing space than before. Moneyfacts said the average “shelf-life” of fixed-rate products has lengthened from 32 days to 43 days, meaning leading deals are sticking around for longer.
Even so, savers are being urged to compare rates and check terms before locking money away, as fixed accounts can restrict access to cash for months or years. For those willing to commit, the improvement versus last year is clear. Moneyfacts says the average one-year fixed bond rate has increased from 3.96% to 4.28%, while the average longer-term rate has climbed from 3.89% to 4.31%.
