🔔 Rates Rundown – fixed rates start to stabilise

Author: Anna Bowes
02nd February 2024

The ongoing pause in the Bank of England’s base rate cut decision is not necessarily good news for savers, as the market sentiment is still clearly that rates will fall going forward – however it does appear to have slowed the pace of the rate cuts happening.

And, there are still plenty of inflation beating accounts available to choose from at the moment, so it’s time to review and to switch.

RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (02/02/2024). All up to date rates can be found on our Best Buy tables.

Easy Access

It been another quiet couple of weeks in the Easy Access table – but there have been a few ups and downs. Unfortunately, more downs than up though I’m afraid.

The beginning of this week saw three of our top five withdrawn, Earl Shilton’s Bonus One (5.15%), Charter Savings Bank’s Easy Access Issue 48 (5.13%) and the Kent Reliance Easy Access Issue 67 (5.11%).

Luckily Coventry Building Society launched the latest issue if its Triple Access Saver (Online) 2 – paying 5.15% so taking the top spot with the same rate from the retreating Earl Shilton. Meanwhile Charter’s new issue of its Easy Access Account – Issue 49 – launched paying a lower rate of 5.10% but making its way back into the table. There was a similar move from Kent Reliance – it’s new easy access account – Issue 68 is paying 5.07% and narrowly misses out on a place in the top five.

Cahoot was the next to go, closing issue 2 of its Simple Saver which was paying 5.12% - but unlike the others mentioned above, its latest offering is paying a much lower rate of just 4.10% so no-where near the top five.

The good news for those savers who opened the old issues of all these old accounts, is that the rates they are earning remains unchanged for the time being.

Sandwiched in between these accounts mentioned is Cynergy Bank’s Online Easy Access Account Issue 69 and Close Brother’s Easy Access Account Issue 2 – both paying 5.10%. So there is still plenty to choose, all paying more than 5% - which is higher than inflation – even if you pay basic rate tax on your savings interest.

Fixed Rate Bonds

The news is a bit better in the fixed rate bond tables. The withdrawals have definitely slowed and there have even been a couple of minor increases!

1 Year

At the time of our last Rates Rundown, the top rate in our 1-year table was 5.16% with SmartSave and the average of the top five was 5.14% AER.

And whilst there has been far less action over the last couple of weeks, there is some activity to report. Allica launched a couple of bonds with higher interest rates which pushed the overall average up to a minimally higher 5.15%. And while Hodge Bank subsequently withdrew its 1 year, replacing it with an account paying 5%, Allica actually increased the rate on its 6 month bond to 5.17%. So as we end the week, with SmartSave’s 1-year bond is still paying 5.16% and the aforementioned 6 month bond from Allica paying 5.17%, the average of the top five remains steady at 5.15%.

2 Years

It’s been very quiet in the 2-year table, withmonly one move and that was downwards. Union Bank of India, which had been paying the top rate of 5.15% replaced that account with a lower paying bond paying 4.95% to put in into joint spot with United Trust Bank and Close Brothers – leaving State Bank of India in the top spot paying 5%.

3 Years

It’s a very similar story in the 3-year table, with one withdrawal and one new bond. The withdrawal was a joint top spot bond from Newbury Building Society paying 4.60% - the good news being that there are two other options remaining, paying the same rate – Sensible Savings from the Access Bank and Close Brothers Savings.

Castle Trust launched a new bond paying 4.55% so as we end the week the average of the top five remains only marginally lower at 4.57%, down from 4.58%.

5 Years

There’s nothing to report in the 5-year table, which is great news for those looking to tie up their cash at current rates for the longer term, but haven’t got around to it just yet.

Fixed Rate Cash ISAs

The activity in the Fixed Rate ISA tables has slowed recently.

In our 1-year table the top rate offered by Shawbrook Bank has fallen from 5.01% to 4.98% - so all of the top five are now officially paying less than 5% - and Shawbrook is still in that top spot paying the market leading rate.

Over in the 2-year table there has been little activity too. The top rate available is still 4.70% with Zopa and the Post Office, with the other three entrants all paying 4.60%.

The 3-year table has seen some more positive activity. While the top rate is still paying 4.41%, a couple of new accounts that have been introduced into the top five by Castle Trust and Close Brothers paying 4.30% and 4.25% respectively has seen the average increase from 4.23% to 4.27% over the last couple of weeks.

The top rate on the 5-year table has remained the same – UBL UK paying 4.26% but there have been some shenanigans in the rest of the table.

Initially we saw some rate hikes from Close Brothers and Castle Trust paying 4.15% and 4.10% respectively and pushing the average up from 4.11% to 4.16%.

But subsequent withdrawals from the West Brom and the Mansfield Building Societies left the average of the top five paying 4.10% overall. A disappointing outcome as we are heading in to the ISA season.