Are fixed savings rates stalling? No new best buys have been launched for over a week

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After months of rate hikes, parts of the savings market finally seem to be coming to a halt after some of the highest paying accounts have been closed.

The past seven days represented the first full week in months without a new best buy being launched for all fixed rates.

Last week, the Bank of England raised the base rate from 2.25 percent to 3 percent, prompting many people to hope this would further boost savings rates.

Since many banks and mortgage lenders have already factored in future rate hikes, it seems that some parts of the savings market have already peaked.

In early November, the one-year yield was as high as 4.65 percent, but Oxbury Bank has since withdrawn that best-buy deal.

Meanwhile, RCI Bank, BLME and Vanquis Bank, all of which paid 4.6 percent, have also withdrawn their deals.

The best one-year fix now pays 4.45 percent, courtesy of Ford money.

Month-over-month there is a clear slowdown at the top of our independent best-buy tables.

Last month at this time, the best one-year fix paid 4.4 percent — just 0.05 percentage points below the current best buy.

Go back exactly one month before and the best buy was paying 3.32 percent – 1.13 percentage points less than what’s available today.

The best two-year fixes remain in the same place they were a month ago. The best deal was 4.7 percent, now the best deal pays 4.85 percent.

Until recently, however, there were deals that paid 5 percent courtesy of Vanquis Bank and BLME. Both have since been withdrawn.

Similarly, the top three-year fixes peaked at 5 percent in recent weeks. However, the best available fares now pay 4.9 percent.

In the broader market, average interest rates continue to rise, although there is some evidence that the pace is slowing.

The typical one-year fix is ​​up 0.05 percentage points from 3.52 percent to 3.57 percent in the past week.

The week before, the typical one-year fix rose 0.21 percentage point from 3.31 percent to 3.52 percent.

A spokesman for the Savings Guru said: “Two things happen on fixed income bonds. First, providers have priced in future increases in their current rates, so we won’t see any major increases from here on out.

‘Longer term swap rates are also falling and market expectations about where the base rate will peak.

“Currently, fixed rates are too expensive compared to both, suggesting that we probably peaked in the near term and there is a risk of declines.

Last week was the first time in months that the best buy price rose on none of the fixed-rate terms.

“Several best buys have been drawn this week and some planned increases have been cancelled.”

For those currently considering a fixed-rate savings deal, it may be a good time to take the plunge as interest rate growth appears to be slowing.

The Savings Guru added: ‘Only competition between banks can drive up rates from here. Of course, there is always the potential for one or two banks that need cash and pay more than the market rate to get it.

“It’s highly speculative to rely on this though, so I’d definitely say to savers it might be safe to grab flat rates now or they could be disappointed.

“At Savings Guru, we’ve seen savers waiting for 5 percent a year and we’ve warned them that we believe they will be disappointed if they wait.”

What about the low-threshold rates?

The top of the easily accessible savings market presented a similar story, until yesterday, when Aldermore launched a best-buy rate of 3 percent.

The previous best easily accessible deal on the market, which paid 2.81 percent, had not been beaten for three weeks.

During that time, the closest competition fell away. Gatehouse Bank withdrew its 2.8 percent deal last week, while Sainsbury’s Bank and Santander recently withdrew 2.75 percent deals.

The Aldermore deal has a snag that it’s a Double Entry Deal* and only allows two withdrawals per year. Any additional withdrawals will cause the price to fall to 0.1 percent.

For those who need unlimited access to their money – Aldermore still pays 2.75 percent for full easy access.*

As for the easily accessible Isa cash market, rates have also improved lately.

Ecology Construction Society launched a new best buy this week with 2.7 percent following Marcus’ 2.5 percent deal last week.

Those who bank with Virgin Money, Clydesdale Bank or Yorkshire Bank can now also access a excluding virgin money easy access cash Isa deal pays 3 percent.

Last month around this time, Isa paid the best easy-access money at 2.25 percent, so there’s been a solid improvement for easy-access savers who want to keep their money in duty-free packaging.

The Savings Guru believes that easily accessible savings accounts in general, whether in an Isa or a standard account, will see further interest rate hikes from here.

The spokesperson for the popular savings website said: ‘With easy access, it’s a different stance because banks can place excess money at the base rate with the Bank of England.

“As only Virgin’s easy access Isa and Aldermore’s Double Access account is the only base rate account, and the base is expected to rise again in December, we think there is room for easy access to go higher from here.

“So while we’d say move now for the best rates, we wouldn’t advise people to just sit there once they’ve signed up for a particular deal.

‘If you don’t earn 2.4 to 2.5 percent, move your money to a provider that does. But keep living for changes and be ready to move again in the near future.’

A slightly more niche area of ​​the savings market that has improved significantly in recent months is cancellation accounts.

The average cancellation account has risen from 1.41 percent to 2.06 percent since the beginning of September.

The best 180-day cancellation bill currently pays 3.5 percent, the best 90-day deal pays 3.4 percent, both courtesy of Oxbury Bank.