- The best one-year bond has fallen from 6.2% to 4.95% in one year
The top one- and two-year fixed-rate savings accounts have fallen sharply in recent months, according to data from Moneyfacts Compare.
Meanwhile, the top three-, four- and five-year bonds remain unchanged.
The top interest rate for a one-year fixed bond fell to 4.95 percent, which is now 0.31 percentage points higher than the top five-year fixed bond at 4.64 percent.
The interest rate difference was 0.41 percentage points the month before.
One- and two-year bonds have fallen as providers price in an expected cut in the base rate in November.
In April 2024, the interest rate spread between the highest one- and five-year bonds was 0.3 percentage points, while these were 5.25 percent and 4.95 percent respectively.
A year ago, the highest one-year bond paid 6.2 percent, while the highest five-year bond paid 5.8 percent, a difference of 0.4 percentage points.
Over the weekend, all remaining NS&I blockbusters with a term of one year and a fixed interest rate of 6.2 percent expired.
According to This is Money’s independent savings charts, the top one-year fixed rate bond offered by Union Bank of India now pays 4.95 percent.
A saver putting £10,000 into this account would earn £506 after a year, compared to £638 with NS&I a year ago. Figures calculated using the savings calculator.
The average one-year fixed rate account pays 4.3 percent, which is now 0.49 percentage points higher than the top five-year fixed rate bond at 3.81 percent, according to Moneyfacts Compare.
| April 22 | Oct-22 | April 23 | Oct-23 | April 24 | September 24 | Oct-24 | |
|---|---|---|---|---|---|---|---|
| Top bond with a fixed term of one year | 1.85% | 4.2% | 4.54% | 6.2% | 5.25% | 5.05% | 4.95% |
| Top two-year fixed bond | 2.1% | 4.5% | 4.55% | 6.05% | 5.1% | 4.9% | 4.72% |
| Top three-year fixed bond | 2.2% | 4.6% | 4.6% | 5.95% | 4.85% | 4.72% | 4.72% |
| Top bond with a fixed term of four years | 2.17% | 4.45% | 4.56% | 5.75% | 4.54% | 4.54% | 4.54% |
| Top five-year fixed bond | 2.4% | 4.55% | 4.65% | 5.8% | 4.95% | 4.64% | 4.64% |
| Source: Moneyfacts Compare. Top interest rates based on a £10,000 deposit at the start of the month | |||||||
James Blower, founder of Savings Guru, said: ‘One-year rates have fallen significantly, with Union Bank of India being an outlier at 4.95 per cent and all other leading providers paying 4.7 to 4.81 per cent as they anticipate an expected reduction of the base interest rate. interest (decrease to 4.75 percent) in November.’
Opening an account with a savings platform can lead to even better rates than opening an account directly with a savings provider.
Savings platform Prosper currently offers increased savings interest rates. Currently, the best one-year solution at Prosper is that of Al Rayan Bank, which is 5.05 percent.
A saver who puts $10,000 into this account would earn $516.85 after a year, according to This is Money’s savings calculator.
Caitlyn Eastell, spokesperson for Moneyfacts Compare, said: ‘It is possible that the savings market is heading into more uncertain times, with the fast-approaching budget and volatile interest rate reviews, which could lead to providers cutting rates further.
‘Savers who would like to lock in a guaranteed interest rate should do so quickly before they take another nosedive.’
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