Savers may wish to lock their money into a top long-term fixed savings deal right now

Savers may wish to lock their money into a top long-term fixed savings deal right now – as the Bank of England decision on Thursday to hold the base rate at 5.25 per cent indicates some of the best offers could soon be pulled.

With inflation now at 4.6 per cent – having fallen from a peak of 11.1 per cent last year – experts believe the base rate no longer needs to be hiked to keep it in check.

Instead, financial markets are predicting the base rate may start to fall next year.

Anna Bowes, co-founder of rates scrutineer Savings Champion, says: ‘This certainly seems the right time to get into a long-term savings deal.

‘At the moment short-term one-year deals are offering better rates than those fixed for five years – and this is an indication that the market expects them to fall.’

Locked in: The Bank of England decision to hold the base rate at 5.25 per cent indicates some of the best savings offers could soon be pulled

She adds: ‘While you can earn more on the short-term deals, when they come to an end you may well struggle to find such a great offer again. This is why getting fixed into a deal for the long-term can often end up paying more money over time. My advice is to get into a fixed deal now before rates fall any more.’

The best buy on a five-year fixed-rate bond is 5 per cent – being paid by the Union Bank of India, according to Savings Champion. This requires a minimum balance of £1,000 to be managed online, by phone or mail. 

Other top paying five-year bond offers include 4.81 per cent by online bank Raisin on a balance of at least £2,000, while Buckinghamshire Building Society offers 4.7 per cent on a £100 minimum where you can bank in branch as well as online. 

On a one- or two-year bond the Union Bank of India is paying 5.7 per cent interest for a minimum of £1,000.

Adam Thrower, head of savings at Shawbrook, says: ‘Given that the Bank of England says it expects inflation to keep falling throughout 2024 it is reasonable to assume that interest rates on savings could now be as good as they are going to get. So, consider moving your money right now before it is too late.’

Although rates are predicted to fall there is still a note of caution in the air – as only six members of the Bank of England’s monetary policy committee voted to hold rates at 5.25 per cent – the other three voted to raise them.

Laura Suter, director of personal finance at the wealth manager AJ Bell, says: ‘The base rate has been held at the same level for the third successive month – and it still remains at a 15-year high. And the next Bank of England announcement will not be made until February because there is a Christmas break.’

She adds: ‘Markets are already now pricing a full percentage point cut to interest rates by the end of 2024. Yet there could still be some whiplash – with a move down or up – if there is a change in market sentiment.

‘But savers should take action now as we have already seen cuts to savings rates, particularly in the fixed-rate market. And this is a trend that is most likely to continue over the following year.’

This post first appeared on Dailymail.co.uk