UK savers are being encouraged to shop around and act swiftly to secure some of the most competitive savings deals still available, with rates reaching up to 4.5% for easy-access accounts and over 4.3% for fixed-rate bonds. This advice comes despite the Bank of England's recent interest rate reductions, which have impacted many savings products, though top rates have proven more resilient than anticipated.
Impact of Interest Rate Cuts and Inflation
The Bank of England's pre-Christmas interest rate cut, the sixth since August 2024, has led to decreases in rates across numerous savings accounts. However, Caitlyn Eastell from Moneyfacts notes that January is an ideal time for savers to reassess their financial goals and ensure their savings are maximising returns. The slight uptick in UK inflation in December has mixed implications: it may delay further rate cuts, potentially slowing the disappearance of top savings rates, but higher inflation also erodes the real value of savers' returns, as highlighted by Alice Haine of Bestinvest.
Fixed-Rate Bonds Offering Security
Fixed-rate bonds provide savers with peace of mind by locking in current rates before they potentially fall. Harriet Guevara from Nottingham Building Society emphasises this benefit. Currently, there are over 1,400 savings accounts offering rates that beat inflation, with about half being fixed-rate bonds. For instance, a one-year fixed-rate bond from Meteor in partnership with OakNorth Bank pays 4.35% on deposits of £1,000 or more. Other competitive options include Shawbrook Bank at 4.27% and OakNorth Bank at 4.23%.
Need for Speed in Securing Deals
Savers must react quickly to attractive offers, as demonstrated by the recent withdrawal of Marcus's 4.55% one-year fixed-rate bond after it was highlighted by Martin Lewis, leading to a surge in applications. Eastell warns that hesitation could result in missing out on the best deals. For those preferring longer terms, two-year bonds from providers like Shawbrook Bank, Investec, and Atom Bank offer rates above 4.1%, providing protection against future rate cuts.
Easy-Access Accounts for Flexibility
For savers seeking immediate access to their funds, easy-access accounts are available with rates exceeding 4%. A notable example is the Chase Saver account from Chase, the UK retail arm of JP Morgan, which pays 4.5% to new banking customers. This rate includes a 2.25% bonus valid for the first 12 months, with the standard rate at 2.25%, and is accessible within the initial 31 days of opening a Chase current account.
Haine advises savers to proactively seek out the most competitive deals to preserve returns on cash holdings. Monitoring best-buy tables on platforms like Moneyfactscompare.co.uk is recommended to stay informed on the latest offers.
