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- The best one-year bond has fallen from 6.2% to 4.95% in one year
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Major one- and two-year fixed-rate savings accounts have plunged in recent months, data from Moneyfacts Compare reveals.
Meanwhile, major three-, four- and five-year bonds remain unchanged.
The top rate for a one-year fixed bond fell to 4.95 per cent, which is now 0.31 percentage points higher than the top five-year fixed bond at 4.64 per cent.
The rate difference was 0.41 percentage points the previous month.
One- and two-year bonds have fallen as providers price in an expected base rate cut in November.
In April 2024, the difference in rates between the main one-year and five-year bonds was 0.3 percentage points, standing at 5.25 percent and 4.95 percent respectively.
A year ago, the one-year core bond paid 6.2 percent, and the five-year core bond paid 5.8 percent, a difference of 0.4 percentage points.
Over the weekend, all of NS&I’s remaining one-year fixed-rate bonds paying 6.2 percent matured.
Now, the flagship one-year fixed-rate bond offered by Union Bank of India pays 4.95 per cent, according to This is Money’s independent savings tables.
A saver who deposits £10,000 into this account would earn £506 after a year, compared to £638 with NS&I a year ago. Figures calculated with the savings calculator.
The average one-year fixed-rate account pays 4.3 per cent, which is now 0.49 percentage points more than the leading five-year fixed-rate bond at 3.81 per cent, according to Moneyfacts Compare.
| Apr 22 | October 22 | Apr 23 | October 23 | Apr 24 | September 24 | October 24 | |
|---|---|---|---|---|---|---|---|
| Fixed bonus of more than one year | 1.85% | 4.2% | 4.54% | 6.2% | 5.25% | 5.05% | 4.95% |
| Fixed bonus of more than two years | 2.1% | 4.5% | 4.55% | 6.05% | 5.1% | 4.9% | 4.72% |
| Fixed bond over three years | 2.2% | 4.6% | 4.6% | 5.95% | 4.85% | 4.72% | 4.72% |
| Fixed bond over four years | 2.17% | 4.45% | 4.56% | 5.75% | 4.54% | 4.54% | 4.54% |
| Fixed bond over five years | 2.4% | 4.55% | 4.65% | 5.8% | 4.95% | 4.64% | 4.64% |
| Source: Moneyfacts Comparison. Maximum interest rates based on a deposit of £10,000 at the beginning 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 between 4.7 and 4. 81 percent, as they factor in an expected cut to the base.” rate (which will fall to 4.75 percent) in November.
Opening an account with a savings platform can generate even better rates than opening an account directly with a savings provider.
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A saver who deposits £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: “The savings market may face more uncertain times ahead, with the Budget rapidly approaching and volatile price changes, which may drive providers down even further. plus fees.”
“Savers eager to lock in a guaranteed rate should do so quickly before facing another drop.”
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