Top Fixed Rate Savings Bond Highest in 10 monthsPersonal_Finance / Saving Bonds Feb 27, 2017 - 12:38 PM GMT
Challenger banks are causing a storm in the fixed rate bond market, with especially the highest rates in the market seeing an increase. The top one-year fixed rate bond has increased to 2.00%, up by 0.60% since January and the first time in 10 months a one-year fixed rate has stood at 2.00% or higher.
Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said:
“Savers have been waiting patiently for some good news and at last there is some light at the end of the tunnel. This sudden boost to rates means that savers looking for a deal today will be significantly better off than even six months ago. In fact, this month so far has seen 53 rate rises to fixed rate bonds, which far outweigh the three rate rises Moneyfacts.co.uk saw over the same period last year.
“This spike in competition all boils down to challenger banks trying to leapfrog their way past the competition to the top of the Best Buys. These lesser known brands have no widespread physical presence in the savings market, and the best way to become established and have savers take an interest is to offer the best rates in the market.
“The main banks, meanwhile, appear to have little appetite for attracting savers. This is reflected in the average rates, as whilst the average has risen, the rise is not as impressive as the best rates in the market. For example, the average five-year fixed rate bond is 1.78% today, up 0.11% from last month, and the one-year fixed rate bond has increased by 0.03% from 0.92% in January. In contrast, the highest paying five-year bond is currently up by 0.45% compared with January.
“This may all be a storm in a teacup, particularly with the apathy from the larger providers meaning that the savings market is unlikely to turn around anytime soon, so savers looking for deals would be wise to act sooner rather than later.”
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