Biggest monthly saving rate cut on fixed deals and Isas in more than a decade

Rates on fixed savings accounts and Isas have been hit with an onslaught of cuts over the last few months, data shows. 

Indeed, these accounts have seen the biggest rate cuts monthly in a decade, Moneyfacts says.

The average one-year fixed-rate bond fell for a second consecutive month to 5.13 per cent, the biggest fall since February 2009.

The days of 6.2 per cent one-year rates are well and truly over for savers as the top one-year bond now pays 5.7 per cent – from Al Rayan Bank. 

Up for the chop: Fixed-rate accounts have seen the biggest rate cuts month-on-month in a decade

The average longer-term fixed-rate bond, those with terms over 550 days, have also plunged to 4.76 per cent, its biggest monthly fall since December 2012.

While the average one-year fixed-rate Isa fell for a consecutive month to 4.99 per cent, dipping below 5 per cent for the first time since July 2023, the biggest monthly fall since February 2013. 

The best one-year fixed-rate Isa pays 5.41 and is offered by Metro Bank.

The average longer-term fixed-rate Isa fell month-on-month to 4.65 per cent, seeing its biggest monthly fall since December 2012.

There is better news for savers with easy-access Isas and notice Isas. The average easy-access Isa rate rose month-on-month to 3.31 per cent and stands at its highest point since December 2008.

While the average notice Isa rate rose to 4.22 per cent and is at its highest since November 2008.

The average easy access rate fell to 3.17 per cent, the first fall since September 2021, while the average notice rate rose to 4.43 per cent and stands at its highest point on Moneyfacts’ records.

Rachel Springall, finance expert at Moneyfacts, says: ‘The fixed-rate cut momentum may well come as disheartening news to savers, but they may be wise to shake any apathy and act quickly to take advantage of the latest top rates.

‘Indeed, the average shelf life of a fixed-rate bond fell to 28 days, down from 36 days a month prior. 

‘This shelf life is now at its lowest point since July 2023, a time where there was notable rate rise activity on fixed bonds. 

‘Between the start of June and July 2023, the average one-year and longer-term fixed bond rates rose by 0.57 per cent and 0.41 per cent respectively, the biggest monthly rises seen throughout 2023.’

Overall, 2023 has been a good year for savers, but it has been largely expected that fixed rates would come down. 

Savings experts had been calling top of the market when the Bank of England held the base rate at 5.25 per cent in September.

Falling interest rates on savings accounts have had a notable impact on the number of savings accounts that pay above the Bank of England base rate this month according to Moneyfacts

At the start of November 2023, around 20 per cent of savings accounts could beat 5.25 per cent, but there are now fewer than 10 per cent.

Rachel Springall advises: ‘As savings rates drop, it is imperative consumers take time to check their existing accounts and ensure they are being paid a competitive return. 

‘If savers locked into a best buy fixed rate bond or Isa six months ago, then they are likely earning more as a guaranteed return than they could get with the latest deals on offer.

‘As it stands, savers will find some of the best returns are on offer with building societies and challenger banks, so it’s worth keeping a close eye on the market and compare deals carefully.’

You can sign up to our savings alerts that reveal the best deals as they land or check our savings tables to stay on top of the best rates available.

This post first appeared on Dailymail.co.uk