I’m afraid that the fall in top savings rates has continued – there’s been the odd bright spot, but there have also been some pretty hefty drops, especially in the fixed term market. All the top fixed term bonds have now fallen below 6% and over the 5-year term, the top rates are only just hanging onto 5% - so we may see longer term rates dipping below 5% in the coming days and weeks.
The best buy easy access accounts continue to buck the trend but things have slowed here too.
So, with the markets now accepting that the base rate has probably reached its peak, we may not see many more increases. Hopefully things will settle down though and the fixed term bonds will at least stop falling. But if you are thinking of locking some money away, you might want to get a move on.
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (08/12/2023). All up-to date rates can be found on our Best Buy tables.
Activity in the easy access table has reduced recently, but the top rates on offer have remained pretty stable which is good news.
Metro Bank has dominated the top spot for a few weeks now, offering 5.22%, shunting Ulster Bank into 2nd place paying 5.20% AER. But no-one else seems to want to challenge them.
Any activity that has occurred has been between for the lower places in the table. Paragon Bank re-launched it restricted access account paying 5.16% - but as the name suggests, only two penalty free withdrawals are allowed each year. And Nottingham Building Society’s Beehive Money launched a bonus account called Limited Issue Easy Access Issue 2 paying 5.15% gross – this rate includes a bonus of 2.50% rate is applied until 30/11/2024 - so currently just under a year.
Across the board, the best rates on offer have continued to fall as the markets get used to the idea that base rate has likely peaked. And the longer the term, the more the top rates have fallen.
1 Year
At the time of our last Rates Rundown, three weeks ago, the top rate available was 5.91% and the average of the top five was 5.83%.
But although there have been a couple of positive moves from the likes of StreamBank and SmartSave, overall, there have been more withdrawals and reductions. As we head into the weekend, the top rate is now 5.80% with Metro Bank and the average of the top five has fallen to 5.64%.
2 Years
It’s a very similar story in the 18 months/2-year table although as we know, the longer the term, the lower the best rates available tend to be.
Three weeks ago, Metro Bank was at the top of the table paying 5.91%, but while Metro is still in pole position, the rate has fallen to 5.80% AER, matching the 1-year offering. There’s really not much more to say as there have once again been more withdrawals and rate cuts than we’ve seen recently, making the average of the top five fall from 5.72% to 5.48%.
Longer Term Bonds
It’s been even more severe in the 3-year and 5-year tables.
In the 3-year table it’s been all withdrawals and rate reductions I’m afraid. The top rate has fallen from 5.55% with Hinckley & Rugby Building Society to 5.35% with Hanley Building Society. Great to see building societies leading the way once again.
In the 5-year table, things have really taken a downturn. Three weeks ago, all of the top five were paying between 5% and 5.50% but as we end the week, only Union Bank of India is hanging onto the 5% club. The next best is now just 4.85% and the average of the top five has fallen from 5.23% to 4.86% over the course of just three weeks.
SmartSave is back but unusually they have not tried to take the top spot, settling for mid table paying 4.82%
This is another indication that the markets believe base rate has now peaked – and at a slightly lower level that previously expected. Other than that, there is little to report.
Unfortunately, the bad news continues into the Fixed Rate ISA arena too. While we are expecting top 5-year fixed rate bonds to drop below 5% shortly, this has already happened with the longer-term ISA rates with the top 3-year ISA paying just 4.87% at the time of writing and the top 5-year ISA paying 4.81%.
Things are looking a little better over the short term, but even so the top rates have fallen. Metro is still at the top of the 1-year table, but the rate on offer has fallen from 5.71% to 5.50%.
Similarly, over 2-years, the news is much the same with the top rate on offer, whilst still from Saffron Building Society, it has fallen from 5.40% to 5.15%.
So as with Fixed Rate Bonds, you might want to move quickly if you want to secure a rate at the current levels as the trajectory appears to be downwards.
Keep an eye on out best buy tables just in case anyone has a surprise on offer.
@savingschampion
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